The concept of continuous accounting — leveraging people, process, and technology to distribute many routine period-end tasks over time — is gaining favor with innovstive finance leaders who are taking a more strategic role in driving business performance. They recognize that the periodic rush to close the books is not only inefficient but also fails to provide business leaders with the necessary insights to impact performance in the moment.
One of the key challenges to instituting a continuous accounting model is a dependence on legacy technology. Systems currently in place for closing the books are based on technologies that have been around for decades. Modern systems can be the catalyst for changing the financial close process itself.
No One Likes a Chaotic Close
The finance team has long learned to dread the end of the financial period, be it the month, quarter, or year. The rush to close the books has traditionally meant late nights, cafeine overdoses, and premature grey hairs. Modern CFOs recognize that they can take greater control of the process by implementing a more strategic process for continuous accounting. While spreading out many of the routine accounting tasks throughout the period makes sense, it is a team efort that requires buy-in from business unit leaders and the C-suite. Providing more accurate and timely reporting on the company’s performance will better inform business unit leaders as well as upper management of changes that can impact the bottom line. Waiting until after the period is over to identify variances such as year-over-year and budget versus actual performance does not work in today’s fast-paced business climate.
This white paper on continuous accounting will explore:
- Why CFOs should be champions of the continuous accounting model
- How technology can be used as a springboard for change
- How to develop an action plan to adopt continuous accounting
- What the components of a continuous accounting framework are (soft close, predictive close, hard close)
- How to assess the impact of a continuous accounting strategy and identify areas for improvement.