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A common challenge growing companies face is a delayed financial close—especially when business operations expand faster than the finance team can keep up. Some growing companies simply accept the status quo, not fully realizing how costly a delayed close can be.
Why is a delayed financial close costly? A delayed close carries several implications:
First, decision makers don't receive insightful financials in a timely manner. Delayed information leads to delayed decisions—which can result in unintended financial consequences.
Second, a delayed close can create opportunities for asset misappropriation.
Third, late finalization of financials can lead to non-compliance with statutory deadlines or contractual obligations—exposing the company to penalties or reputational damage.
Fourth, the audit process may take more time to complete—which can result in higher audit costs.
Given these implications, growing companies need an optimized financial close.
This can mean different things to different companies. Some may want a five-day close; others a seven-day close. Whatever that number is, the important thing is that growing companies change the mindset first. The journey to an optimized close is far less difficult than it sounds—once the mindset shifts. Identifying the root causes of those bottlenecks can make the journey even smoother.
If you're looking to optimize your close process and need finance function guidance, contact VMC.
VMC's views are general insights—not one-size-fits-all advice. Every company's situation is unique.
