19 things CFOs can do to deliver month-end close on day 1

Impossible? Not quite.

Day 1 can actually be a realistic goal for finance teams to work towards.

We set out to understand the steps top CFOs take to get financial statements hot off the press and into the hands of their stakeholders before the insights go cold.

So, naturally, we did what any good CFO or controller would do. We took it from an accounting expert who’s done it many times before, Tyler Caskey (a former CFO and now Partner at TheBeanCounters), to learn more about the day 1 financial close.

Let’s dig in.

How long should a month-end close take?

A typical month-end close process in a business takes at least five days. But high-performing finance teams are shortening this cycle every year. 

A recent Weel poll showed that 44% of CFOs and controllers took 2-5 days to close the books. Most others still take longer than this.

But Tyler says there are some simple, logical changes you can make to complete the month-end close process on day one.

Steven Bragg’s day 1 close concept

Back in 2005, Steven Bragg published a book called ‘Fast Close: A Guide to Closing the Books Quickly’.

And while some of the recommendations (like not waiting for paper bank statements) are a little outdated for today’s tech-savvy CFOs, the overall concept is even more relevant today than it was back then.

His advice?

Don’t try to do it all at once.

The idea is to pull or push everything that doesn’t have a material impact out of the “closing day”.

This makes a lot of sense, given the amount of stress finance teams usually put themselves through to get final numbers out the door.

Why is a fast close so important?

Because you shouldn’t have to settle for the chaos.

And closing faster adds value, too.

If you think about it, every extra day it takes to communicate the prior month’s result delays the actions users of those reports might take.

It also gives you and your finance team more time to spend analysing and interpreting the result for your stakeholders and focus on more rewarding, strategic work.

19 ways to improve your month-end processes

By removing time-wasters and bottlenecks, the once ambitious day 1 close starts to look attainable.

Here’s how you can continuously improve your month-end processes and move closer towards day 1, according to Tyler.

(Psst... looking for a comprehensive guide to achieving your best ever month-end close? Download our handy checklist.)

1. Start prior to month-end

First, we’ll start with the basics. 

Month-end is always a pressure point for finance teams. Oftentimes it’s a race against the clock with missing information and a growing list of errors to resolve. So, as soon as you’ve finished reporting for the prior month, get a head start on the next month.

Sure, you won’t have all the numbers yet. But you’re likely to have something you can get started on. Tyler suggests looking at your cash flow, payroll or balance sheet first. 

The idea is that you help your finance team smooth out their workload, operating like a well-oiled machine, all throughout the month.

2. Do it once, do it right

Spot a transaction you don’t know what to do with? Don’t take a punt on something you’ll probably have to correct later on. 

“If someone doesn’t know where to put a transaction, I leave it in the bank account as unreconciled, and then we do it correctly. It eliminates a lot of rework,” Tyler says.

Hot tip: Use a modern tool like Weel that automatically captures merchant data, GST and GL codes from each transaction. You’ll only have to handle them once before they’re posted into your accounting system.

3. Just deliver financial statements

The biggest barrier to delivering a fast close? Waiting for reports from other departments to prepare your entries.

Thankfully, it’s also one of the easiest problems to fix, and all it takes is reducing how many things you report on in the first place. Tyler says the number one priority for a month-end close is delivering financial statements. 

“Don’t batch subjective and non-financial reports into your financial statements. That is the best hack.”

Where possible, CFOs should empower their stakeholders to access real-time data, such as sales results shown via a live dashboard. If other reports are mandatory, do them on day 2.

4. Review your balance sheet

Most finance teams review their balance sheet in reflection. But opportunities to free up cash can often be hiding in plain sight.

Hot tip: Treat your balance sheet like your inbox.

“I look at my balance sheet every single morning and make sure nothing is blown out. Ask your team to identify inefficiencies and fix errors when they’re not rushed. It sounds super simple, but it’s incredibly effective.”

Regularly reviewing your balance sheet will help you put your cash to more productive use and reduce complexity.

You only have about 22 working days in each month. So, ask yourself:

• How many of those days are spent looking backwards?
• How many of those days are spent adding value?

5. Centralise your accounting team

If your organisation has multiple entities or business units, you may end up waiting for others to finalise their month-end before you can close out the group result. 

But rather than just consolidating financial reports, Tyler says you should consolidate your team and processes.

“If you buy another business, you should look at bringing all your finance processes into one team. You can avoid a lot of unnecessary noise and rework, especially with intercompany movements.”

6. Shorten the billing process

The sooner you get your bills out, the sooner you get your money back. Shortening your billing process can free up more working capital to reinvest into the business.

“You have to know where your money comes from and when your stakeholders are ready to send an invoice. Because, as we all know, cash is king. Without good billing, you can't really be doing anything else as a CFO.”

Generating month-end invoices may be the single biggest bottleneck task for finance teams. But you might be surprised by the response you can get from departments if you start to ask simple questions about their billing processes.

“I ask about 100 questions to all involved in the billing process, and I'm not lying about 100. I want to know every single part of that process because if you can improve your billing, you can speed up your close and add a lot more value as a CFO.”

The takeaway: Never assume you know all the answers. Good leaders and change managers are always curious. And if you can move the wider business onto a more predictable structure, that day 1 close won’t be just a pipe dream.

7. Automate as much as possible

Let’s be real. No one’s passion is data entry.

So if there are tools that can help keep your books balanced and your transactions error-free, with fewer resources, finance should embrace them.

According to Weel’s Finance Automation Report, 65% of CFOs said their fellow C-suite agreed with them on the areas to automate.

“Being able to push transactions into a finance system that you don’t touch is what you should be aiming for. These days, you can automatically generate and send invoices to your customers through Xero Practice Manager, or automatically pull your expense data from Weel into your accounting system.”

Tyler suggests hunting down every manual journal, like payroll, and setting up automatic workflows between your systems. This will save you an hour or two every single fortnight.

8. Bill all throughout the month (if you can)

Don’t let your invoicing build up. In fact, Tyler argues that waiting until the end of the month can be a massive time-waster.

Tyler says: “The optimal is always billing throughout the month. If a billing issue comes up, I do not leave it until day 1 of the month's end. I solve it on that day, every single day.”

This is not a silver bullet, but more of a reminder to nip any issues in the bud before you begin the close process.

9. Give one person responsibility

They say that when something is managed by many, things are missed. Well, this applies to finance teams, too. The idea here is that nothing falls through the cracks, and the process is consistent when you delegate an owner.

“I ask that person if there are any billing or invoice data issues every single morning. If there's an unallocated credit note, I look at that throughout the week or throughout the month.”

10. Set a hard cut-off

Give everyone a firm deadline for getting their client billing, stock amounts or expenses in. Better yet, integrate your accounting system with a modern spend management tool. 

For example, if you’ve set a lock date in Xero, any outstanding transactions in Weel will automatically roll over to the next month.

“Be clear and have good communication with the team that month-end doesn’t have to be perfect. If we miss an immaterial invoice, it’s okay to move it into the following month.” 

11. Use standing and recurring journals

You don’t need to be perfect at month-end. 

“High-level accrual estimates are usually good enough for board-level decisions. You only have to be right once a year when you’re doing your annual tax return.”

Again, ask yourself: is it really worth waiting to know the exact amount of an invoice, if you already have a good idea of what it’s going to be?

12. Work with your suppliers

Get your suppliers to align their billing periods with your reporting calendar. Whether it’s monthly, quarterly or by financial year. This will simplify your accounting.

“If I've got insurance, I try to get my insurance from 1 July to 30 June, or I try to put my insurance on a monthly payment schedule. If I've got leases that are on a quarterly payment schedule, I try to switch them over to monthly.”

Tyler also says that if you improve your cycle by offering to pay suppliers earlier or more frequently, you can usually negotiate a good discount.

You can also use Weel’s Billing tool to automatically schedule EFT payments at the best time for your cash flow. It means you don’t have to worry about manual transfers or ABA files.

13. Perform regular stocktakes

If you work in retail or hospitality, there’s no reason to leave your inventory until the following month.

“Don’t wait until after the month to do an end-of-month stocktake. You can do them during the month and adjust at the end or on the 25th to get accurate numbers.”

Again, don’t bundle your ongoing or BAU tasks, like stocktakes, with your month-end close checklist.

14. Check your percentages early

The best CFOs are always reviewing their P&L to spot errors, cut costs and up their revenue. The fastest way to do this is to work out each of your expense lines as a % of your sales.

“For example, if you’ve made $1 million in sales in a month, you’ll have a rough idea of the headcount needed to generate that result. If it doesn’t make sense, something’s probably wrong.”

The takeaway: Perform a daily high-level check of your key percentages to ensure that neither sales, wages nor other costs are grossly under or overstated. This will help you defuse fiscal problems before they become major losses.

15. Let go of your legacy expense processes

Sorry for the cliche, but it’s time to work smarter, not harder.

“Really look at the processes that are most painful and time-consuming for your revenue-generating teams (like sales and marketing) and see where you can help.”

In any business, this is accomplished by reducing low-value, high-effort tasks like chasing employees for receipts or incomplete expense reports and matching individual expenses to your chart of accounts.

Tools like Weel can free up hours every month, not just for finance, but for anyone that uses a company card. For the CFO, that time can be spent on strategic finance and building meaningful relationships with other departments.

“Spend money on good expense management because it makes your team members inside and outside the finance team a lot happier.”

Whenever you’re able to reduce low-value work, you should do it.

16. Review your payroll cycles and payment dates

From a bookkeeping perspective, paying out wages or salaries closer to month-end makes calculating payroll accruals much easier. Paying monthly as opposed to fortnightly reduces the number of pay runs.

Convenience aside, CFOs have a responsibility to their employees’ financial well-being and job satisfaction. It’s just not practical to pay people earning $80,000 or less on a monthly basis.

But sometimes, it’s the little things that make the biggest difference — small tweaks or actions that can save you a lot of pain without requiring your employees to make big sacrifices.

“When I walked into this retail business, their pay cycle ran from Wednesday to Tuesday, and they paid it on Tuesday, so it was always this big rush. All we did for that business was push the payment date to Thursday. That gave the managers more time to approve timesheets and improve their efficiency, and Finance wasn't spending all this time chasing rubbish they didn't need to.”

17. Accruals don’t need to be perfect

Again, if an accrual isn’t perfect, consider how material the actual variance might end up being. If near enough is good enough, save time there and spend it more wisely elsewhere.

“Take your electricity, for example. If you know it’s around $500 per month, accrue $500. No board member has ever asked me about a $30 difference.”

The takeaway: You’re aiming for materially correct, not 100%. Timeliness is also important.

18. Calculate leave and wage accruals early

If your business has relatively predictable payroll costs, you may be in a position to calculate your leave and wage accruals before the end of the month. Doing so will free up the precious time you have.

“This doesn’t have to be perfect. If you’ve got three days of unpaid wages, calculate an average day’s wage and times that by three. It doesn’t need to be to the dollar. To the nearest thousand is usually good enough for month-end reporting.”

But, of course, make sure your reports are 100% accurate at year-end.

19. Establish a culture of continuous improvement

Remember: streamlining the month-end close is not a one-off project. There will always be areas to improve as your business grows and technology advances.

The business won’t be the same in the future, and you need to make sure Finance is spotting changes and adapting to them. A few years of stagnation can make process improvement seem like an insurmountable task.

Final thoughts

CFOs who master the fast close have a hunter’s mindset: they get out there and spot opportunities when they’re in plain sight. Take the quick wins and plan for the hard-fought ones. Some closing words from Tyler:

• Don’t rush: Don’t try to cram all of your tasks into the first five days of the month, but do chip away at what you can across the month.
• Clean the finance house first: Ensure your financial processes are in order before looking to improve other departments.
• Be curious: Ask your stakeholders good questions and look for ways to streamline recurring bills, payroll and other processes.
• Make one big improvement per month
• Make one little improvement per week
• Share the wins loud and clear: Bring people into your process early and often, and share wins big and small to as large a group as possible.
• Use a checklist. Closing the books doesn’t have to be complicated. Our comprehensive checklist makes it easy to organise and streamline your month end process and make room for value-added, money-making tasks.

Weel was born from the strain admin put on small and medium-sized businesses when reconciling expenses and closing the books. Weel’s refreshingly easy financial stack boosts satisfaction across the business and allows CFOs to focus on more rewarding, strategic work.

Join hundreds of top-performing CFOs who use Weel every day to maintain accurate, up-to-date books without getting stuck in the weeds on every transaction. Try Weel free for 14 days, no credit card required. Or request a demo to speak with a Weel product expert.