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How to Deal with High Maintenance (in Closing the Books and in Dating)

October 22, 2011


 

All close tasks are not created equal.   Some activities can be started and completed in isolation, pretty much at any time during the close, such as the payroll accrual.  Other activities, like the sub ledger close out, have a ripple effect on the entire close process.  They are called critical path activities.  When critical path activities fall behind, they delay a chain of subsequent activities.  And when that happens, you can pretty much kiss your fast close good-bye.  So it goes without saying, critical path activities must be treated with extra special attention.

Caring for critical path activities during the close is just like caring for a high maintenance girlfriend.  The key is to create meaningful face time.

When I used to consult for Fortune 1000 companies, one idea I consistently suggested to clients was to hold a 15-min daily touch point during the close to address critical path issues.  Daily group meetings may seem ludicrous in the heat of the close, when you’re already missing out on dinner with the family and a good night’s sleep.

(And you might add that it’s just what a consultant would recommend — more meetings!)

But here is the thing:  Teams that are serious about a streamlined close know that they can lose hours at a time waiting for an important issue to be resolved over email.  Emails are easy to fire out.  Unfortunately, once they are in someone else’s inbox, they become one of many other competing priorities that the person may or may not get to right away.  A few hours of dead time becomes significant when the close is measured in days and not weeks.

The trick of the daily 15-min touch point is to, well, keep it within 15 minutes and yet achieve results.  Here is how you do it:

  1. Schedule late in the afternoon with about two hours left in the workday.  Why?  Productive meetings have action plans.  But a good meeting also gives the impression that once those specific actions are completed, there is no more work to be done.  So hold the meeting late in the afternoon after much of the daily work is done.   Then, come up with action plans that the team can finish before everyone goes home.
  2. Only discuss activities on the critical path.  Focus on two questions:
    • Troubleshoot– How to salvage critical path activities that are falling behind on schedule and are delaying the team?
    • Anticipate – What major activities are coming up in the next two days that may derail the close timeline?  No need to go too far down the critical path.  Remember, you’re reconvening tomorrow.
  3. Start on time.   And don’t worry.  The whole team will ensure it ends on time.

Everything else can be relegated to email.

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One Comment leave one →
  1. Sergei R. permalink
    December 16, 2011 4:58 pm

    Nancy,
    I have seen again and again how routine closings turns into a hair pulling expercise all becuase of not doing the simple things. You are so right about establishing and monitoring “the critical path” framework. This trully is an excellent advise. Keep up the good work!

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