The 2 Day Close, Phase 1 – Defining Your Approach to Closing

In my last post, Closing Your Books Faster and Maximizing the ROI on Your ERP Investment,  I outlined an 8 phase approach to create a culture in accounting to accelerate month end closing and recognize a greater ROI.  This article, Defining Your Approach to Closing will help you develop your expectations and goals, and help to define the scope of this project. 

To effectively implement change, focus on these 3 objectives:

  1. Motivate your staff to continually strive for process improvement.
  2. Push your current software functionality to its limits.
  3. Engage your staff in more analytical and rewarding tasks.

In the late 80s, I worked for a government contractor with three separate legal entities and over 350 employees. We used a COBOL based accounting system designed for government contractors. We manually entered 350 weekly timesheets and the accounting period was closed in less than 2 days. 

  • The staff was encouraged and rewarded for continually striving to improve our processes. 
  • Our staff pressed software functionality to the limit and suggested numerous upgrades. 
  • Staff retention was high, as the staff was engaged in more analytical functions and less manual tasks

With each period closing, we realized additional process improvements. Many months were closed in less than 2 days.  Our year-end audit adjustments were minimal as were our DCAA audits. 

In the 90s, I worked for a software company implementing their accounting software for government contractors. I applied these three objectives and developed a highly successful software implementation methodology.  

  • Our clients’ staff were encouraged to continually review and revise processes for efficiency during the implementation. By having a clear understanding of the processes and being open to change, the staff quickly embraced the software and training retention was increased.
  • We encouraged the clients’ staff to push the limits of software functionality. This created software “champions”, who supported and trained other staff on how to best utilize the software.  
  • The new accounting processes engaged our clients’ staff in more productive and analytical tasks. 

ERP consulting is typically limited to software set up, configuration and training. My implementation methodology included evolving the role of the accounting department, which created a very loyal and satisfied customer base.  

Throughout the transition, the role of accounting will evolve and your staff will consistently push back on changes. Accountants view most change, even process improvements, as an increase in risk and a potential delay in the closing schedule. Predicated on the current processes, accounting operates as a reactive gate keeper of financial information. Through this project, your staff will evolve and develop to become proactive analytical managers.  My next article will provide a better understanding of an accountant’s perspective and how to manage their reluctance to change. 

Most companies are surprised by the push back outside of the accounting department. During this project, you should be prepared to expect push back from other groups. This transition will require you to correct internal communication issues and task managers with periodic data verification during the accounting period. Managers will push back on certain items thinking they are accounting tasks.  A another article, later in my series entitled “Continually Monitoring Data” will help engage other departments to accept their role in the transition.  

Since technology is constantly changing, transitioning the culture in your accounting department is more important today than ever before. Organizational transition is a large and challenging project requiring proper planning and project management.Take a holistic view of accounting and finance across your company to reimagine processes and elevate your staff. Work through each of the eight phases, which I will be outlining in subsequent articles.

My next article “Approaching Your Staff” will help you understand an accountant’s perspective so you can lead them through these changes.

If you have questions, please email me directly at joejezior@jezadvisors.com.

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