Period-end management reports are an important form of decision-making support that helps leaders gain insight into specific business areas. These reports typically include financial highlights, graphical analyses, and comments on trends or variance from expected results. They also provide a foundation for more advanced forms of decision support like trend and key performance indicator analysis. Given these reports’ importance to management as an assessment of the previous period’s performance, it is critical to get them done as quickly and accurately as possible.

This cycle time calculates the number of calendar days (including weekends) between running the initial business entity trial balance and completing the period-end management reports. It is a measure of the overall health of the organization’s general accounting and financial reporting processes.

Companies that can produce these reports faster leave more time for finance teams to focus on daily operations and provide other forms of decision support and analysis to the business. Longer cycle times, by contrast, mean further days down the line for more advanced reporting that helps to identify and track key business drivers.

So, how do companies stack up on this measure? Based on data from our Open Standards Benchmarking database, APQC finds that top performers produce period-end management reports in 7 days or fewer. This is more than twice as fast as bottom performers, which take 16 days (or more) to produce the same reporting. The median cycle time is 12 days.

What exactly do companies gain by having faster cycle times? One of the most important functions of these reports at APQC and many other organizations is that they provide an opportunity for collaboration and accountability between leadership teams and the CFO.

For example, a critical part of the process for me includes the period after my team and I produce the preliminary period-end management report and send it out to the leadership team for review. An efficient approach to these reports not only gives my stakeholders more time to review the initial report, but also gives my team and I more time to address their most important areas of concern, implement any corrections, and ensure a higher degree of accuracy.

On the Same Page

If your period-end reports are taking longer than you’d like, it may be tempting to imagine that technology can solve all of your problems. It can certainly help, but there is a people component to effective period-end reporting that you shouldn’t ignore. The CFO needs to roll up his or her sleeves, collaborate, and keep the finance team engaged throughout the period (not just during the big work-spike at the end) to ensure that everyone is contributing to a common goal. Below are three ways that leading companies do this for faster and more accurate period-end management reports.

Clarify roles and responsibilities. The people component of period-end reporting includes clarifying roles and responsibilities well in advance, not only within your finance team but also with any managers and management teams leading operations. Based on the conversations APQC has with a wide range of organizations, I can say that even large corporations with the money and technology to streamline and automate the process can struggle with determining who is responsible for what. But getting a handle on this area is a foundational part of a smooth and effective reporting process; after all, people won’t play their part effectively if they’re not sure what part they need to play.

Do the heavy lifting upfront. Once everyone is clear on their role, there’s no reason to wait for the period-end — you can do a good deal of the heavy lifting for your period-end reports in advance. Doing as many tasks as possible upfront —like reconciliations — can help reduce the work-spike that typically characterizes the end of the period. With much of the number-crunching done early, your team can focus more on checking its work and finalizing the report when the period-end rolls around.

Work for high-quality data. High data standards and good data governance help ensure that data does not require extensive, labor-intensive scrubbing and manipulation to be usable. Make sure you reach an agreement with internal stakeholders as to which data the report will leverage and which system will be the system of truth for reporting. More broadly, make sure that your data align with your company’s technology and finance processes.

When managers get timely and accurate period-end reports, they have more time to make better decisions during the next period and to make any needed adjustments. An efficient and accurate process also means fewer work spikes at the end of the period and more time for activities that help drive the business forward. More broadly, an optimized period-end reporting process means that you’ve put in the work to make sure your team is well-organized and equipped with the right data and technology, which benefits not just this process but many others.

Perry D. Wiggins, CPA, is CFO, secretary, and treasurer for APQC, a nonprofit benchmarking and best practices research organization based in Houston, Texas.

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3 responses to “Producing Management Reports Faster: Metric of the Month”

  1. This is very true and important aspect of CFO’s role. Before diving in into transaction capturing and report, it is critical that the base is set right. Roles and responsibilities should be clear for everyone complemented by teamwork.

  2. One of the ways to get a faster turnaround also is by the use of recurrent journals for some transactions like short term prepayment. It is a fact that you do not need to wait till the end of month to close out some transactions

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