When a newly acquired company’s close process stretched beyond 30 days, the new CFO set an ambitious goal: close the books in five. This goal, which would require a complete shift in mindset and execution was met with alarm and skepticism by the accounting team. 

What is our Starting Point? Not Great. 

An assessment of the accounting and finance teams was performed, including mapping out what was done and when, and how much time was spent. This revealed that these teams had been doing things the same things the same way for years:

  • Plant closing was consistently delayed, creating bottlenecks in shipment recognition, billing, and ultimately, cash flow.
  • AP remained open for weeks, making cut-off a moving target and pushing downstream activities later into the month.
  • Work on the fixed asset and depreciation entries waited until AP was closed, creating further delays
  • Teams operated in silos; rework was common, and late journal entries were the norm.
  • Almost no automation was deployed: AP, billing, cash application, and journal entries were entirely manual.
  • Perhaps the biggest pain point for the new CFO – results and completed financial statements arrived after the fact when it was too late to try and respond. There were no daily flash reports, or early reporting of sales trends or issues. No analysis of trends or opportunities.

The Approach

One thing we’ve learned from many transformation efforts is that unless the people who do the work change what they do and how they do it, the change is not sustaining. Collaboration is key. So, we didn’t just throw technology at the problem. First, we got alignment—leadership and operations had to be on board. We worked through what is in it for the team and gained their buy-in for the vision. Time was invested in team building and learning about root cause analysis, innovating and continuous improvement. 

The Roadmap

A roadmap to tackle the highest-impact areas first was developed in collaboration with all parties. We agreed we would tackle these areas one at a time in order of priority, which was:

  • Accelerate plant close and automate billing to provide daily sales report and set the stage for rapid close.
  • Cut off AP by Day 2 and leverage automation
  • Streamline fixed asset entries and unless there were unusual large asset purchases, use a cut-off of 10 days before close.
  • Reduce rework and late adjustments by understanding root causes and addressing these at the source.

Execution

We implemented a continuous improvement process, engaging cross-functional teams to identify root causes, develop solutions, and drive change. Tackling one major area at a time and working through all the many challenges with the support of leadership, we were able to gain traction and begin to turn the tide. Each month saw noticeable improvements that built confidence, pride, providing satisfaction to the team. Indeed, some of the team members who seemed the most skeptical at the outset became the biggest contributors.

The Results

Real transformation was achieved through incremental improvements, month after month. 

  • Closing plants and billing daily provided real-time visibility, enabling a daily sales report.
  • AP cut-off was tightened and automated using OCR and AI tools to analyze purchase and spend data and build a solid foundation for accruals.
  • Fixed asset processes were initiated 10 days before close and completed by day 2 of close. 
  • Rework and late adjustments dropped significantly.

The finance team didn’t just close faster—they closed smarter. By Day 3, reconciliations were complete. Errors were caught early. And the business finally had timely data to inform performance.

Bottom Line

What once took over 30 days now takes five. The team didn’t get there overnight—but with focus, collaboration, and a willingness to challenge the status quo, they turned the close process from a bottleneck into a competitive advantage.

How We Did It

For those who want more detail, here’s a closer look at what worked:

Key Concepts

  • Prioritization: We assessed the impact of each area and focused efforts where they would move the needle most.
  • Collaboration: Solutions were co-developed and implemented by cross-functional teams.
  • Continuous Improvement: Each month, we tackled more challenges, made progress, and adjusted based on what worked. Post-close reviews helped refine our approach.
  • Agility: Agile principles helped us break big challenges into manageable changes that delivered fast results, and helped us shorten cycle times.
  • Accurate, not exact: We embraced materiality and used reasonable estimates rather than waiting to get every number perfect.

Specific Actions

  • Cut-offs and Sequencing: Establishing early cut-offs for key activities—like shipping, billing, and AP—enabled other processes to follow on time.
  • Plant Close and Billing: We emphasized the importance of posting shipments daily, backed by clear processes, accountability, and reporting tools.
  • Billing Automation: Invoices were auto-generated from ship-confirmed orders using a simple but effective routine.
  • AP Cut-off: We used invoice and budget analysis to estimate accruals, booked them early, and reversed them the following period.
  • AP Automation: We deployed OCR and AI to automate invoice intake and transitioned vendors to ACH to streamline payments.

Reducing Rework: We addressed root causes by working directly with process owners at the source of the data.