A good close is not simply a shorter close. It produces complete, accurate and reviewable financial information through a repeatable process.
Stage 1 — Plan
Define the close calendar, owners, dependencies, materiality thresholds and expected evidence. Activities should have clear completion and review criteria.
Stage 2 — Cut off
Communicate transaction cut-off, identify late documents and control manual entries. Revenue, purchases, inventory movements, payroll and capital expenditure require specific attention.
Stage 3 — Reconcile
Reconcile bank, receivables, payables, inventory, fixed assets, payroll, taxes, intercompany and other material balances. A reconciliation should explain the balance—not merely match two totals.
Stage 4 — Estimate
Record accruals, provisions, impairment, depreciation, foreign exchange and other estimates using current data, approved methods and documented assumptions.
Stage 5 — Review
Use analytical review to identify unexpected movements, unusual ratios, dormant accounts, duplicate entries and inconsistencies between operational data and accounting results.
Stage 6 — Report
Map the trial balance, prepare schedules, cash flows and disclosures, and perform consistency checks across statements, notes and management reports.
Stage 7 — Improve
After reporting, classify late entries, recurring reconciling items and review comments. Assign root-cause actions so the next close improves.