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The goal of any organization should be the ability to produce timely and accurate financial statements within a reasonable period of time after the month has ended. The financial statements are critical to management in their ability to understand the financial health of the organization and allow management the opportunity to make decisions in a timely manner.
Monthly closing is an essential part of obtaining an accurate and relevant financial reporting, which can greatly help management to:
- Understand where they stand in terms of financial performance indicators.
- Compare actual monthly results to their budget, so they can improve performance, focus on lack areas, and take the necessary corrective actions where needed.
- Prevent manipulation and reduce risk of being mislead.
- Being able to always make informed decision.
Monthly closing from the other end can help finance managers and staff to:
- reconcile their BS accounts on time so they can make sure their reporting reflects actual results.
- Respond to financial threats on time.
- Report budget variations and fraud/manipulation to top management on time.
- react faster to their financial needs.
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