Best practices for the month-end close

Most companies, from small businesses to publicly traded firms, have a month-end close process. If all goes well, the close is a routine process that does not attract much attention from management or business owners. But it’s a completely different story if the numbers are late—or wrong.

Many young CPAs start their accounting careers either involved in closing the books or in auditing them. Here are some suggestions on how young CPAs can improve their work in the close process.

Remember that while the close process can seem routine, it’s essential to the business—and often to a young CPA’s development. “It is not exciting to close the books, but it is important,” said Zeeshan Baig, CPA, CGMA, manager of Financial Planning and Analysis at G&K Services and a graduate of the AICPA’s Leadership Academy. “Executives utilize the information provided to run the business, and public company investors rely on it and expect it to be right.” The process also provides young CPAs with background about the company’s operations, and experience that they will need to become a well-rounded CPA.

Accuracy is critical, so resist the pressure to close too fast. “I have a 10-day rule,” said Somya Munjal, CPA, founder and CEO at Youthful Savings and managing partner and founder of CPA for the People LLP. “Ten days after month end is a good rule before presenting close information. You need to set expectations, manage upward if you are getting pressured, and explain what it takes to get the numbers done right.” Still, young CPAs should keep an eye out for process improvements that would shorten the close time frame. Small improvements made one at a time won’t rush the process but still can have a significant overall impact. 

Manage your time and be well-organized. “It’s important to be efficient and learn to meet closing deadlines,” said Samantha Villani, Financial Services Audit Senior at KPMG LLP. “Use an Outlook calendar, and set individual work goals for the day and the week. Don’t leave the office for the day until the day’s goals are met.” She adds that it is helpful to participate in staff meetings to discuss timelines and deliverables so everyone understands expectations. Finally, communication is key to avoiding delays and helping improve overall quality.

Be aware of technology that can help with the close. Simple changes to automate account reconciliations, departmental allocations, and recurring calculations can save time and reduce errors. “There are always new ways to get things done,” Munjal said. “It’s good to shop around and be aware of technology for your company or your clients to use to have a better close.” Use information obtained from websites, articles, and training courses, and be proactive about researching and sharing the information you obtain with others.

Learn from your mistakes and do better the next time; you will improve with time. If this is your first accounting job out of college, you may not know the ins and outs of all the accounting processes or software you’ll be using. Excel skills are extremely important. Ask questions and be prepared to learn on your feet. Take advantage of your company or firm training programs. Also, if you are using a new financial system, it’s helpful to keep a notebook of tips learned from other users for future reference, Villani said.

Build relationships with others outside of finance. Make them aware of the process and what information is needed and when. It can be as simple as going to lunch or happy hour, or joining a sports league at work. “Accounting should know operations and partner with others to understand how the business is run,” Baig said. “Then CPAs can look at the numbers and see if they make sense. It takes time and effort to build relationships, and the onus is on CPAs to get out of their comfort zone and interact with others inside and outside of work.”

Maria L. Murphy is a freelance writer based in Wilmington, N.C.

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