Being a CEO feels like you’re juggling 30 things at once, so one of the best things you can do (for your sanity) is recognizing which tasks can be allocated to other people.

With every month-end close process being fundamental, it isn’t easy to gauge how much the CEO should be involved and what aspects of the month-end close process can be dished out to others. 

So the big question is:

What should the CEOs involvement be in the month’s end? It depends on how big the company is. You want to be able to recognize what the key elements are that you can sign off on. For smaller companies, you want to be in touch with some details and want to sign off on others. 

Diving Deeper

Depending on whether you’re a for-profit or a non-profit company, you need to make sure that your income and sales are being recorded correctly. In the U.S., we have a new revenue recognition called 606. This is a HUGE change for everyone, so understanding how that works and how the numbers are portrayed is vital. 

And when it comes to spending, a lot of the time you want to set a minimum level for, let say, accounting, where you could decide that you let your CFO look at anything below $10,000 variance. Above that, you, as the CEO, need to step in and have people explain that to you in detail. 

Deadlines

Deadlines are massively important to adhere to when closing off the month. The expected date for one company entity is the 15th of the month. For some multi-entities, you may be looking closer to the 25th, but if you’re the CEO, on the 25th the numbers are getting stale. 

And it’s not always contingent on the size of the business, it’s really how your systems process and how smoothly and automatically everything is able to run. You can also stress test your systems to pinpoint where they need to improve, and you can do this by moving that date up to say, the 10th or even the 5th. And in doing this, you’ll get better and better, and who doesn’t love that?

Once you close the accounting and do the internal controls, you want to have your financial analyst analyze those numbers. That way, you get the unit economics, the analysis of the variances, what’s changed, and overall just an informed management report that you can sit down with and talk about. 

Delays

Delays! Everyone hates them, but let’s talk about why they happen in the first place. Often, they can be unique situations; think of something like a special sale that came in with a special contract. You would have to adapt with auditors and talk about how to account for that in particular. 

In a more general sense, delays come from a lack of communication. Another big delay that could happen is software that is not used correctly. 

Delays can come in all shapes and sizes, whether it’s an intern royally messing something up, or if a typhoon has wiped out all the internet in an area for days on end. 

So with all this talk, what are the actual benefits of closing the month? Well, accountability. AND it helps prevent fraud. Because as everything gets closed, everything gets checked. So a good system will identify any fraud within at least 29 days.

In the end, it’s better to do it than not to do it. Save yourself a future headache by getting on top of the situation and being able to end the month knowing you’re on the right track!