Challenge — Difficulty Getting the Books Closed
Action Plan — Fill Resource Gaps and Re-introduce Closing Discipline
- Plan for an adequate level of resources as a better alternative to late reporting and reporting errors, by either hiring additional staff or enlisting operations and other resources to contribute as a regular part of the closing process
- If temporary resources are used, integrate those resources into the full-time team and make sure regular communication is taking place among the extended team members
- Make sure roles and responsibilities are well defined, in writing, including review responsibilities
- Develop a closing calendar with input from all affected team members; the focus should be on what is achievable, and expectations on timing of deliverables should be set realistically
- Communicate the timing and nature of deliverables to senior management
Challenge — Integrating Information from Outside the Financial Process
Action Plan — Regularly Reconcile Estimates with Actuals and Improve Critical Processes
- Reconcile estimates to actuals regularly (at least quarterly), to avoid a year-end crunch that will delay year-end reporting and raise concerns from auditors or investors and directors
- Get representatives of the operations and finance teams together to for a process improvement project. This can be a high-level gap analysis – an honest assessment of the current process vs. desired process and agreement on how to fix the issues. The detailed approaches of the Six Sigma, LEAN, or Continuous Process Improvement (CPI) methodologies are also useful.
Challenge — Little Staff Development, Communication, Documentation, and Training
Action Plan — Formalize Annual Finance Team Development and Back-up Plans
- The Chief Financial Officer (CFO) should create a succinct written plan for the closing process. The document should address role descriptions, critical processes performed, and the back-up person for each critical process.
- Review the plan with the finance team and senior management to ensure that critical processes are not overly concentrated with one person, especially the CFO, revise as needed and ensure that plans are made to close any skills gaps.