Steven Bragg is the author of “Fast Close” and 18 other accounting books including one of the most best read accounting books in the U.S.-“Accounting Best Practices”.
Some of you may be thinking that you would prefer to watch a Minnesota Twins game where the club makes their annual come back from a slow start into an exciting pennant contender. If you are more consumed with getting the books closed faster, this post is for you.
Each year it seems there is more and more pressure to close quickly with Sarbanes-Oxley requirements and organizations eagerness to find out early how they performed due to the economy.
Some of the bullets from Bragg’s book on closing your books more quickly are the following:
- Shifting the timing of closing activities out of the core closing period. Here Bragg presents practical ideas such as completing the bank reconciliation every day, bill recurring invoices, updating the bad debt reserve, and making a host of logical accruals that can be figured out far ahead of time before the “closing crunch”. In both Dynamics GP and Dynamics SL schedules and adjustments to menus can be made so that a clear process can be documented and followed to ensure these “middle month” closing procedures get moved up.
- Standardizing and Automating the use of Journal Entries. Both Microsoft accounting products offer nice options for auto-recurring, auto-reversing and templated transaction that can be slightly altered to speed up entries each month.
- Shifting re-billable expenses out of the core closing period. This one is pure common sense. If re-billable expenses don’t affect your P&L and are not material to your balance sheet-why let them slow down your closing process?
- Use a web-based timekeeping system for your consulting staff. Both Dynamics GP and Dynamics SL offer web-based time-entry via a Sharepoint-based tool called Business Portal. Both offer this option for far less money than a typical user. A light user can be used instead.
- Streamline the commission calculation process. Steve’s main point here is the commission computations are far too complex at most firms. When each invoice needs to be reviewed, calculating commissions is not fun or able to be speeded up enough.
So if you are serious about closing your books earlier, regardless of which accounting system you use, you should buy Steve’s book “Fast Close”. You can get it from Amazon. It’s a tiny investment for making you look smart at speeding up your close and getting your firm the information it wants more quickly.
Steve’s gotten funnier as he has made his fortunes in writing these useful books. The first few were quite authoritative-but there weren’t too many laughs. A recent example is where he references that many consulting firms will recommend that a new ERP system is needed to reduce the amount of days it takes to close. Steve’s thought on this is that “Although such installations can shrink the closing interval, they also require the wealth of a maharajah or small oil nation to implement.” His ideas are free is his next thought.