Achieve a Five-Day Financial Close

Close your books in 5 days

Insight from StrategicCFO

Let's discuss one of the most crucial metrics for any finance team: the time it takes to close the books each month and quarter.

This is like the finance equivalent of a 100-meter dash - the faster you can get it done, the more impressive your skills (and the happier your investors and stakeholders will be).

So, what's the gold standard we should all be striving for? Five business days.

That's right, you want to be able to wrap up all your month-end close procedures and have those beautiful financial statements ready to go within a week of the period ending.

I know what some of you might think: "Five days? That's impossible! Our books are a mess, our processes are all over the place, and we're lucky if we can close by the end of the month."

Trust me, I've been there. I've heard some firms taking a whopping 15 business days to close the books each month. That's almost 3 weeks!

But here's the thing: just because that's how it's always been done doesn't mean that's how it must be. As former GE CEO Jack Welch once said,

In other words, if your finance processes can't keep up with the pace of your business growth, you will be in trouble.

So, how do you go from a 15-day close to a 5-day close? It won't happen overnight, but it is possible with a bit of process optimization.

When I first took over as COO, my goal was to shave off three days from our close process each quarter until we reached that magical five-day mark.

And guess what? We actually beat that timeline and got there even faster than I had planned.

Now, I know that for many first-time leaders, the idea of a five-day close can seem impossible.

But here's the thing: even if your books aren't fully closed, you still have access to a ton of real-time data that can give you a good sense of how the business is performing.

You can track metrics like cash balance, new bookings, and revenue growth daily or weekly without waiting for the full close process to be completed.

Don't let perfection be the enemy of the good. Yes, a 5-day close is the ultimate goal. But in the meantime, focus on identifying your key metrics, streamlining your processes, and communicating early and often with your stakeholders.

You might not have a perfect set of financial statements on day 5, but you can still provide a ton of value to the business by keeping everyone informed and making data-driven decisions.

And if you start to feel discouraged or overwhelmed, just remember what the famous author Douglas Adams once wrote:

That's right. Even the great Douglas Adams understood that sometimes, despite our best efforts, things don't always go according to plan.

But the key is to keep pushing forward, focus on your goals, and never stop trying to improve.

It might not be easy, but it's worth it.

Learn More: Guide on when to hire a bookkeeper