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Summary
the art will continually change, making it necessary to go back to these items
constantly. Thus, the best approach is multiple best practice implementations,
which are constantly reviewed.
The other key issue is the timing of the implementations. For most of these
best practices, it is best to conduct an implementation outside of the period when
financial statements are prepared. This point is best illustrated by perusing
Exhibit 12.6. This exhibit clusters all of the best practices into the time before the
end of the reporting period, in the midst of it, or after it. The vast majority of the
practices fall into the first category. This means that most financial statement best
practices can be completed at leisure, when there is not a rush to produce finan-
cial information. The main benefits of this timing issue are that implementations
can be completed more smoothly; there is time to correct mistakes; and if there is
an implementation problem, it can be deferred in favor of the procedure it is
replacing. Therefore, timing of the changes tends to be a minor issue.
The overall impact of best practices on the financial statements function falls
into two areas. One is that financial statements can be completed much more
quickly, efficiently, and with fewer errors, all of which are greatly appreciated by
upper management. The standard for world-class companies with multiple sub-
sidiaries is to issue financial statements in two working days, while single-loca-
tion companies have been known to issue them in as little as one day. These
benchmarks are quite attainable if all of the best practices noted in this chapter
are not only installed, but also constantly reviewed to ensure that they are being
used in the most efficient manner. The other impact of best practices is that the
workload for producing financial statements partially shifts into the week prior to
the end of the reporting period from the week following it. The evidence of this
shift is amply illustrated in Exhibit 12.6, where there are 16 listed activities that
can be completed prior to the end of the reporting period. All accounting man-
agers should integrate this shift in workloads into the schedules of their staffs,
ensuring that there are no excessively high or low work periods resulting from the
change in systems.

SUMMARY

This chapter covered a variety of techniques for improving the speed with which
financial statements can be distributed. These methods vary from shifting the
work of the closing process to before the end of a reporting period to avoiding
some of the closing work entirely. Most of the suggestions noted here will work
in all companies, irrespective of the closing systems they already have in place. A
few items require a careful appraisal of the current situation, however, such as
avoiding the completion of the bank reconciliation and using an automated cutoff
system—these require either special training or new computer systems and must
be used with an eye to the risk of system or training failures and their impact on