Insights · WiseOwl Partners

Insights

Three things we believe about running a finance function.

Short reads for controllers and owners. Every one ends with what it changes in the close. Published quarterly, written by the people doing the work.

Ask us insteadQuestions we get most often are answered by the assistant at the bottom right of this page, and in person on a 30-minute review.

Resource · WiseOwl · The close

A close date is a decision date. Everything else follows it.

A close that lands on day 24 means leadership reads last month's numbers as next month is already a quarter gone. Every decision taken in between is taken on a feeling. A close that lands on day 5 means the numbers arrive while the month is still recognisable, and the conversation changes from explaining the past to changing the next one.

The date is not the hard part. The hard part is that a fixed date forces everything upstream to be fixed too. Cut-off agreed with the people who raise invoices, accruals estimated on a rule rather than a discussion, reconciliations owned by a named person with a deadline of their own. Most companies that miss the close date are not slow at accounting. They are waiting on somebody who does not know they are on the critical path.

What it changes in the closeWe publish the close calendar to everyone who feeds it, not just to finance. Every task has one owner and a date. The first month is usually late; the third is not.

Resource · WiseOwl · Audit readiness

Audit readiness is a filing habit, not a project.

Ask a finance team when they get ready for the audit and the honest answer is usually "when the request list arrives". At that point the work is archaeology. Somebody is looking for the approval on a contract signed eleven months ago, and the person who approved it has left.

The alternative is unglamorous. Approvals, reconciliations, contracts and policy acknowledgements are filed in the month they happen, against the account they affect, in a place the auditor can be pointed at. Nothing about this is difficult. It is a habit that has to survive a busy month, which is why it needs to be someone's named job rather than everyone's good intention.

What it changes in the closeThe audit file is a standing part of the close checklist, not a separate exercise. When the request list arrives, most of it is answered by sending a folder.

Resource · WiseOwl · Process

Map who touches it before you automate any of it.

Most broken finance processes are not badly designed. They were designed once, correctly, and then had four exceptions added by four different people, each of whom has since moved on. The result is a route with nine hands on it where three would do, and nobody who can say why any particular hand is there.

Drawing it changes the conversation immediately. Once the route is on one page, the steps that exist only out of habit are visible to everyone in the room, including the people who own them. Remove those first. Then automate what is left, and put a date in the diary to check whether the gain survived the quarter it was made in.

What it changes in the closeWe map before we tool, and every process change carries an evaluation date. If the change did not hold, we would rather find out ourselves.

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