By Matthijs Dijkema RA, founder and managing director of Fidugius
The quality of the numbers is often determined before the busiest weeks begin. Most of the delay arises before the first adjusting entry is even posted.
A month-end close that finishes on time does not automatically lead to a smooth year-end close. The annual close brings together additional disclosures, estimates and reviews. Finance depends on information from other departments, entities and external specialists. The auditor also needs to test the figures and be able to assess the underlying positions.
For (Group) Finance, the close is therefore more than a reporting obligation. It is the moment that reveals whether the organisation has reliable figures in time to make decisions and account for its performance.
When a close overruns, I often hear that there were not enough people or not enough time. That can certainly play a part, but capacity is rarely the whole story. Back in 2014, Janvrin and Mascha studied the close process at 22 organisations and pointed, among other things, to the role of collaboration, estimation processes and new reporting requirements. That calls for a broader question: how much of the work has been made predictable and manageable in advance?
THE YEAR-END CLOSE IS NOT JUST ANOTHER MONTH-END
The month-end close is repetitive and often delivers management information quickly. Teams can standardise their work, learn from the previous cycle and spot deviations earlier. The year-end close, of course, comes around only once a year. That is when estimates, unusual transactions, additional disclosures and the external audit all come together. Finance also depends on treasury, tax, HR, actuaries, the business and local finance teams to prepare the annual accounts.
An organisation can have its month-end close well under control and still run into delays at year-end. Twelve monthly cycles build routine. The year-end close requires preparation for work that does not recur every month. For finance, this means that the quality of the close is largely determined before the busiest weeks begin.
WHERE THE DELAYS ARISE
1. Work has not been made predictable in time
A good close starts with a calendar that makes clear who delivers what, and when. A date alone is not enough. Everyone involved needs to know what information is expected, in what format, who reviews its quality and how delays are escalated.
Distinguish early between recurring work and exceptions. Reconciliations, standard reports and predictable supporting documentation should run as routine as far as possible. Unusual transactions and matters of judgement deserve focused attention. An acquisition, for example, is a one-off event, but the steps for accounting, consolidation and reporting can be set out in advance. If the same surprise comes back every year, it belongs in the planning.
2. Systems and data do not produce comparable results
A single ERP system can support standardisation, but it does not guarantee consistent reporting. Conversely, multiple systems can work well if definitions, account mapping, cut-off arrangements and reporting formats are aligned. The challenge arises when entities or business units use different data, procedures or interpretations. The work then shifts to manual reconciliations and adjustments during consolidation.
Deloitte describes six interrelated elements of a strong close, including a standardised source of truth, a fit-for-purpose systems landscape, an efficient close process and clear governance over processes and data. The common thread is that a good close is not achieved through the choice of ERP alone: data agreements, ownership, analysis and control also need to fit together.
3. Difficult accounting questions are discussed too late
At year-end, several areas that require judgement come together: revenue recognition, provisions, impairments, tax positions and other items that involve estimates. With a long-term production contract, for example, the question may be when and how progress is measured. If a change in methodology is only raised at the end of the year, assessing it takes up unnecessary time.
So agree on these principles in advance and document the rationale. An accounting and reporting manual, a consistent way of working and worked examples help local teams assess similar facts in the same way. The auditor can then test the application against a known baseline, instead of the group having to reconstruct its principles every year.
4. Roles and responsibilities are not clearly defined
A close is not just the work of the finance department. Information about contracts, claims, personnel, investments and operational performance often comes from other parts of the organisation. If it is unclear who provides the information and who is responsible for reviewing it, the result is late questions and missing support.
Good closing instructions make explicit what information is needed, who owns it, who reviews it and when matters are escalated. Discuss unusual items in advance and make clear where the applicable guidelines and formats can be found. That way, the close becomes part of the wider framework of governance and internal control, rather than an isolated finance exercise.
AGREEMENTS MUST BE EASY TO FIND AND KEPT UP TO DATE
A calendar, closing instructions, accounting policies, reporting formats and contact persons belong together. When they circulate through the organisation as separate files, versions get mixed up and it becomes hard to see which agreement applies. Knowledge is also lost when the people who built it up move to other roles or leave the organisation.
A central, searchable environment with a clear structure can connect these elements. From a closing instruction, a controller should be able to click through to the relevant accounting guidance, the reporting calendar and the right template. The Fidugius Accounting & Reporting Manual is designed to bring policy and practical closing information together in exactly this way, maintained by the organisation itself.
AI ONLY HELPS ONCE AGREEMENTS ARE IN PLACE
It is tempting to look to AI to solve these bottlenecks. Yet the same applies to AI as to the close itself: the outcome is only as good as the agreements it rests on. If accounting policies, definitions and source information are not in order, AI cannot resolve that ambiguity.
In a 2025 McKinsey survey of 102 CFOs, 44% of respondents said generative AI was being used for more than five use cases in finance, compared with 7% in the previous survey. That points to broader use within finance, but the survey does not measure how deeply AI is embedded in the year-end close.
For the financial close, the most promising applications lie close to existing, verifiable work. AI can help distil accounting policies down to what is relevant for a specific question, prepare an initial variance analysis based on verified data, organise open questions and check reports for inconsistencies. For reconciliations, matching and detecting unusual entries, data analytics and traditional automation can also take a great deal of work off people’s hands.
AI should not decide on its own how a material contract is accounted for or which provision is required. Its output must be reviewed, be traceable to reliable information and fit within the organisation’s access and approval rules. AI can prepare the work, but the finance professional remains responsible for the judgement.
WHERE CAN (GROUP) FINANCE TAKE CONTROL?
Start with the delays that come back every year. Map out which steps are delivered late or incomplete, where adjustments and rework arise and which dependencies lie outside finance. A dashboard can track both speed and quality: for example, lead time, the share of timely and complete submissions, late adjustments after consolidation, open reconciliations and the time spent on corrections.
Link that information to clear owners and discuss the recurring causes before the next close. A major transformation is not always needed. The first improvement is often for the organisation to agree clearly on what needs to be delivered, who oversees it and where the current information and instructions can be found.
A good close is not just a fast one. The figures need to be available on time and reliable enough to base decisions on. That requires clear governance before the busiest weeks begin.
