Fourteen days. That is how long a 120-person building products manufacturer took to close the books every month. Not because the accounting team was slow — because they spent most of those days waiting on paper from other departments.
Nine months later, the close finishes in four days. The headcount did not change. Here is the difference, day by day.
What the old fourteen days looked like
- Days 1–2: chasing shipping logs and receiving paperwork from two plants.
- Days 3–5: reconciling inventory by hand, because the system count and the floor count told different stories.
- Days 6–8: reviewing invoices that had been entered late or entered twice.
- Days 9–13: accruals, reconciliations, and manager review in a stack of spreadsheets.
- Day 14: publish, and immediately start preparing for the next close.
What the new four days looks like
- Two days before month end: bank reconciliations and standard accruals are prepared in advance. Nothing here depends on the final day’s activity.
- Day 1, by 11 a.m.: all transactions are posted. Shipping and receiving have a hard daily cutoff, and it is enforced by the warehouse manager, not accounting.
- Day 1, afternoon: the inventory snapshot reconciles automatically against cycle counts taken daily, so there is no month-end surprise.
- Day 2: an exception report lands with nine items on it, not 400. Someone reviews nine things in an hour.
- Day 3: department managers review and sign off in the system.
- Day 4, by noon: close is published.
The two changes that made four days possible
The first was a daily cutoff. If a shipment is not entered by 4 p.m., it belongs to the next day. That one rule removed the entire “chasing paperwork” phase.
The second was moving from reconciliation to exception reporting. The old close reviewed everything, which meant people spent days confirming that nothing was wrong. The new close assumes the data is right and asks the system to show only what looks off.
Here is the part that surprised the CFO: the accuracy improved. Fewer late entries meant fewer corrections, and the audit trail got cleaner because every posting happened in the system instead of on a clipboard.
This kind of change is mostly process design, which is what separates useful ERP Consulting from a software install. The ERP Consulting team that helped here spent more time with the warehouse manager than with the accounting staff.
Tomorrow, ask one question: which single transaction type causes the most rework at close? Fix the cutoff rule for that one type next month and watch what happens to day three.