Learn about month-end closing challenges and the business case for automation
Month-end closing is a critical business control process. In this unit, you'll track your progress on the Month-End Close Workflow Scoreboard. This scoreboard measures the three dimensions that matter most for growing businesses.
Timing
How many days does it take to close the month?
Target: < 2 days
Sarah's Problem: Weekend (2+ days)
Accuracy
Is the close error-free and balanced?
Target: Zero errors
Sarah's Problem: Multiple errors, uncertain numbers
Compliance
Are all GAAP adjustments complete?
Target: All adjustments complete
Sarah's Problem: Missed accruals, incomplete adjustments
Why This Scoreboard Matters
- • Slow timing = Delayed decisions, missed opportunities
- • Poor accuracy = Uncertain strategy, stakeholder mistrust
- • Weak compliance = Incorrect financial statements, audit risks
Every business must complete these steps to close the month properly. You'll learn each step in detail over the next few lessons.
Identify Accruals
Revenue earned but not yet billed, expenses incurred but not yet paid
Record Deferrals
Prepaid expenses used, unearned revenue recognized
Make Adjusting Entries
Update account balances for depreciation, inventory adjustments, etc.
Prepare Financial Statements
Generate accurate income statement, balance sheet, statement of changes
Close Temporary Accounts
Transfer net income to retained earnings, reset accounts for next period
1. What is the "month-end close workflow scoreboard" that you'll track in this unit?
2. Which of the following is NOT part of the month-end close workflow?
3. Why are closing entries necessary at the end of each month?
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