CFOs have been trying for years to chop back the time they need to complete the financial closing and reporting cycle, but by and large the results have been disappointing. In a 2007 study, The Hackett Group reported that the average company took nearly six days to close its books, up from 5.2 days in 2003, with another five days spent on reporting.
The delay is significant, “because by the time you get the results out, you may have only one or two weeks to correct any issues that may also go through to the following month,” says John E. Van Decker, research vice president with Gartner Inc. “There's definitely a desire to trim down the number of days for the close, but it's still a challenge for most companies.”
Organizations vary in the amount of automation they've applied to what's often called the “last mile” of finance. “Most have some kind of a consolidation solution, but still do a lot of their reporting in Excel,” notes Van Decker. “It's hard to control what people do in Excel, and it's hard to ensure that you have an auditable process, both from a segregation-of-duties viewpoint and also in terms of being able to trace back the changes that were made in a financial report.”
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