Efficient financial close as a lever for timely management information

Many finance functions are facing increasing demands to deliver accurate and timely financial data – without additional resources. Month- and quarter-end closes remain recurring pressure points where delays and errors can impact reporting, steering, and decision-making.

Accelerating the close is therefore not only a matter of speed but also of improving the quality and usability of the financial data on which management bases its decisions.

However, this is easier said than done. The closing process is often complex, involving many stakeholders, spanning functions, entities, and system landscapes. Rarely is there a single cause – more often it is a combination of manual processes, unclear responsibilities, and limited utilization of existing systems and technologies.

In the illustration below, we highlight three concrete focus areas that we at KPMG see as central to achieving a more efficient and robust close process. 

1. Structure and alignment of period-close activities across entities

An efficient and timely close requires both overview and consistency. Many businesses and organizations find that their closing activities are characterized by variations across entities for the same types of tasks, dependency on key individuals, and manual routines. An example is accruals, often prepared in spreadsheets and calculated differently, or accounts that fail to reconcile between systems. The lack of standardization leads to bottlenecks and firefighting during the close period.

A good place to start is by developing a standardized and integrated closing calendar that provides an overview of activities, dependencies, roles, and deadlines. Such a calendar should not just be a timeline but a management tool that enables companies to

• identify and move non-critical tasks outside the close period to reduce peak workload

• harmonize processes and responsibilities across business units and locations 

• increase transparency and enable timely follow-up when delays occur.

Another key element of an effective close is managing accruals and provisions. Many businesses and organizations spend disproportionate amounts of resources estimating and documenting relatively small amounts – often in an effort to achieve a degree of precision that is neither required nor relevant for management decisions.

Businesses and organizations can benefit from working with initiatives such as:

• Standardizing and aligning calculation methods for provisions across entities 

• Applying materiality thresholds and reducing frequency

• Automating calculation and posting.

For most, it is a significant step forward simply to clarify when the level of detail adds value and when it unnecessarily delays the process.

2. Better utilization of systems and data to automate tasks

Another key lever for improving the close is ensuring that the system landscape and technological capabilities are used effectively. Many organizations already have functionality in their ERP and BI systems that could eliminate manual tasks, improve data quality, and provide better visibility – but in practice, this functionality often goes unused.

We often see that differences in local setups and user behavior result in inconsistent utilization of system functionality. This leads to manual workarounds, lack of transparency, and increased risk of errors.

Harmonizing system usage – across entities and functions – can therefore serve as a powerful lever to automate and accelerate closing activities. Examples of relevant focus areas include:

• Standardizing the use of systems and digital tools to optimize the closing process 

• Digitalizing the closing calendar and task assignments

• Establishing a close “cockpit” with real-time status and notifications to key stakeholders.

Automation does not necessarily require complex technology with long implementation timelines. Finance teams can also succeed by leveraging low-code solutions or standard modules in existing systems, for example:

• System integrations to avoid duplicate entries 

• Workflow handling of manual journal vouchers

• Automatic generation of commentary for monthly reports using AI technology.

The key is to focus on where automation creates business value while ensuring that new solutions are embedded in the organization. Experience shows that it is often lack of user training and ownership – not the technology itself – that prevents businesses and organizations from realizing the benefits.

3. Organizing where tasks should be performed

Even the best-designed processes and systems fall short if it is unclear who is responsible for what – and when. Optimization of the close process is therefore incomplete without also addressing organizational anchoring.

A well-designed task delivery model is a prerequisite for achieving speed, quality, and consistency in the closing process. Essentially, this involves defining where in the organization activities are best and most efficiently performed: centrally, regionally/locally, or via third parties.

For larger organizations, we recommend a global delivery model, consolidating tasks into as few hands as possible to ensure efficiency and harmonization of standard activities. At the same time, new technologies such as AI open opportunities for automating tasks and insourcing activities that were previously outsourced.

We also see benefits from using data models to automate the preparation of data for reporting to local authorities. This further enables a more efficient delivery model and outsourcing of specialist functions such as VAT and tax, where knowledge of local legislation is essential and where attracting or retaining local expertise can be challenging. 

Overall, businesses and organizations should consider the following organizational measures:

• Establish end-to-end process ownership to harmonize activities across entities

• Consolidate tasks into fewer hands and organize them so they are executed as cost-effectively as possible with the right quality

• Use technology and data models to automate and insource manual tasks 

• Outsource specialist activities requiring knowledge of local legislation.

Conclusion

Optimizing the entire close process at once can feel overwhelming, and many businesses and organizations hesitate because they do not know where to begin. However, experience shows that even small steps can create momentum and drive larger change. A good starting point is to harmonize the closing calendar, move non-critical tasks outside the close period, and begin automating simple, repetitive tasks – this reduces peak workload and creates a more stable foundation for further improvements.

At KPMG, we help businesses and organizations identify the right first steps, deliver quick wins, and at the same time set the direction for a long-term transformation. In this way, the close process not only becomes faster and more robust – but also a source of stronger management information and real business value.