Accounting technology / Glossary / Days to close

What is days to close?

Definition

Days to close is the number of working days between the end of an accounting period and the point at which the books are closed and results reported. It is the main measure of how efficient a finance team's month-end close is, and the figure most close improvement projects set out to reduce.

Also calledclose cycle timetime to close

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Measured in: Working days after period end
Main drivers: Reconciliations, consolidation, review
Category: Financial close

How days to close is measured

Most teams count working days from the period end to the day the final management accounts or reporting pack goes out; some stop the clock when the ledger is locked. The days go on cut-off and accruals, reconciliations, intercompany and consolidation, review and reporting. Teams reduce the number by reconciling during the month rather than after it, automating matching and journal entries, standardising the checklist and consolidating entities in software rather than spreadsheets. Close tools such as FloQast, BlackLine and Numeric run the close checklist, so progress against the target is visible during each close.

Common questions

What affects the number of days to close?+

The number of entities and currencies, how much reconciliation is left until after period end, how accruals are estimated, intercompany matching and consolidation, and how many review steps sit before reporting. Quarter and year end usually take longer because of audit and external reporting.

How can a finance team reduce days to close?+

Reconcile accounts through the month, automate bank and intercompany matching, standardise accruals, run the close from a shared checklist with owners and deadlines, and consolidate entities in software.

Does a faster close reduce accuracy?+

Not when the time comes out of manual matching and waiting. Moving work before period end, with reconciliations done daily, usually improves accuracy because issues are found closer to when they happen.