The monthly close, four days to under fifteen minutes
A fast close is only useful if it can be trusted. This build uses an invented division. Switch each step between manual and automated and see the time saved, then plant an error in one source and watch the checks hold the run until a reviewer clears it.
What this shows
- Before and after, step by step, with the time each step takes
- Tie-outs and flags that stop a bad number
- A planted error that holds the run until a reviewer clears it
- Hours saved as each step is automated
How I use it
- Showing how a reporting cycle is rebuilt and controlled
- Deciding which manual step to automate first
- Explaining to a reviewer what a failed check looks like
Explore the model below. It uses an invented company and invented numbers.
Explore the model
Illustrative model · Synthetic dataWide tables scroll sideways: swipe inside a table to see every column.
Sample build: the monthly close for an invented division
An invented service division closes its month from five source systems. Switch each step between manual and automated to see the time saved, then plant a break in one source and watch the checks hold the run until a reviewer clears it.
Synthetic inputs for illustration. Not data from any employer.
What to try
- Switch Run the checks and review to manual. The close jumps from minutes to a full day, because that step is 8 hours by hand.
- Press All manual, then First three steps, then All automated, and watch the calendar empty out.
- Open Controls and planted error, press Plant the break, and watch the run get held.
- Open How the checks work to see which check catches which break.
Time to release
14 min
By hand: 4.0 days
Hours saved each close
31.8 h
About 381 hours a year
Machine run time
14 min
9 of 9 steps automated
Run status
Released
Nothing flagged
How to read this
- Steps run one after another on 8-hour working days. Hours by hand are the time one preparer spends. Automated times are the run time.
- Reviewer time is counted separately. A person still reads anything the checks flag, and that time is added once a break is planted.
This plan automates 9 steps for 43 days of build effort. It saves 31.8 hours a close and repays the effort in about 11 closes. Build effort is invented.
The steps in this plan take 14 min and save 31.8 hours a close.
The nine close steps. Switch a step between manual and automated.
| Step | By hand | Automated run | In this plan | Starts |
|---|---|---|---|---|
| Pull extracts from the five systemsExport the month-end file from each system and save it to a shared folder.By hand 3.0 h, automated 2 min. In this plan 2 min, starting day 1. | 3.0 h | 2 min | 2 min | Day 1 |
| Check each file arrived and load itConfirm every file is there, open it and load it into the working file.By hand 2.0 h, automated 1 min. In this plan 1 min, starting day 1. | 2.0 h | 1 min | 1 min | Day 1 |
| Tie the extracts to the ledgerCompare each source total with the ledger and chase any difference.By hand 3.0 h, automated 1 min. In this plan 1 min, starting day 1. | 3.0 h | 1 min | 1 min | Day 1 |
| Work out accruals and standard adjustmentsEstimate work done but not yet billed, and the other month-end entries.By hand 3.0 h, automated 2 min. In this plan 2 min, starting day 1. | 3.0 h | 2 min | 2 min | Day 1 |
| Build the variance bridgesSplit each move from last month into volume, price and mix.By hand 5.0 h, automated 3 min. In this plan 3 min, starting day 1. | 5.0 h | 3 min | 3 min | Day 1 |
| Build the profit and loss tablesLay out revenue, cost lines and operating profit for leaders.By hand 3.0 h, automated 1 min. In this plan 1 min, starting day 1. | 3.0 h | 1 min | 1 min | Day 1 |
| Format the packSet the charts, number formats, page order and labels.By hand 3.0 h, automated 2 min. In this plan 2 min, starting day 1. | 3.0 h | 2 min | 2 min | Day 1 |
| Draft the commentaryWrite what moved and why, for the reviewer to edit.By hand 2.0 h, automated 1 min. In this plan 1 min, starting day 1. | 2.0 h | 1 min | 1 min | Day 1 |
| Run the checks and reviewTest the numbers, send questions back, fix what is wrong and sign off.By hand 8.0 h, automated 1 min. In this plan 1 min, starting day 1. | 8.0 h | 1 min | 1 min | Day 1 |
| Total, one step after another | 32.0 h | 14 min | 14 min |
Close calendar. This plan touches 1 of 4 working days. Amber is work by hand and teal is an automated run.
Day 1
14 min of work- Pull extracts from the five systems, automated2 min
- Check each file arrived and load it, automated1 min
- Tie the extracts to the ledger, automated1 min
- Work out accruals and standard adjustments, automated2 min
- Build the variance bridges, automated3 min
- Build the profit and loss tables, automated1 min
- Format the pack, automated2 min
- Draft the commentary, automated1 min
- Run the checks and review, automated1 min
Day 2
FreeNo close work on this day.
Day 3
FreeNo close work on this day.
Day 4
FreeNo close work on this day.
Which step to automate first
Shortest payback first. Payback is the number of monthly closes it takes for the hours saved to repay the effort of building the step. A day of build effort is 8 hours.
Steps in order of payback
| Step | Hours saved each close | Build effort | Payback |
|---|---|---|---|
| Run the checks and review | 8.0 h | 4 days | 4.0 closes |
| Build the profit and loss tables | 3.0 h | 3 days | 8.0 closes |
| Pull extracts from the five systems | 3.0 h | 4 days | 10.8 closes |
| Format the pack | 3.0 h | 4 days | 10.8 closes |
| Check each file arrived and load it | 2.0 h | 3 days | 12.1 closes |
| Tie the extracts to the ledger | 3.0 h | 5 days | 13.4 closes |
| Build the variance bridges | 5.0 h | 9 days | 14.5 closes |
| Work out accruals and standard adjustments | 3.0 h | 6 days | 16.2 closes |
| Draft the commentary | 2.0 h | 5 days | 20.2 closes |
What to try
- Press Plant the break with the defaults. Three checks fire on one source and the run is held.
- Choose The same wrong figure on both sides. The ledger and the report agree, so only the variance flag sees it.
- Lower the size of that break to 5 percent and watch it slip under the limit.
- Raise the tie-out tolerance above a late ledger entry and watch it pass.
Plant a break
One batch of records is loaded two times, so the report counts it twice. The ledger is right.
Breaks in place
None. The month is clean.
Set the checks
A line is flagged when it moves by more than the limit and by more than $25,000. A tie-out or completeness failure always holds the run, whatever these settings are.
Run released
Every source ties to the ledger, every file is complete and no line moved more than the limit.
Reviewer time still needed on open items: 0 min (15 min each, invented).
The exception queue is empty. Every source tied, every file was complete and no line moved over the limit.
Tie-out: the report against the ledger, line by line. A line ties when it is within the tolerance.
| Line | Ledger | Report | Difference | Result |
|---|---|---|---|---|
| Revenue | $12,400,000 | $12,400,000 | $0 | Ties |
| Labor cost | $5,150,000 | $5,150,000 | $0 | Ties |
| Materials | $2,980,000 | $2,980,000 | $0 | Ties |
| Travel and expenses | $640,000 | $640,000 | $0 | Ties |
| Vehicles and fuel | $720,000 | $720,000 | $0 | Ties |
| Operating profit | $2,910,000 | $2,910,000 | $0 |
Completeness: records delivered against records the source says it holds
| Source | Delivered | Source holds | Result |
|---|---|---|---|
| Billing system | 8,200 | 8,200 | Complete |
| Labor system | 6,400 | 6,400 | Complete |
| Purchasing system | 2,150 | 2,150 | Complete |
| Expense system | 1,320 | 1,320 | Complete |
| Fleet system | 980 | 980 | Complete |
Variance flags: this month against last month
| Line | Last month | This month | Change | Move | Flag |
|---|---|---|---|---|---|
| Revenue | $12,100,000 | $12,400,000 | +$300,000 | +2.5% | Within limit |
| Labor cost | $5,050,000 | $5,150,000 | +$100,000 | +2.0% | Within limit |
| Materials | $2,900,000 | $2,980,000 | +$80,000 | +2.8% | Within limit |
| Travel and expenses | $625,000 | $640,000 | +$15,000 | +2.4% | Within limit |
| Vehicles and fuel | $700,000 | $720,000 | +$20,000 | +2.9% | Within limit |
| Operating profit | $2,825,000 | $2,910,000 | +$85,000 | +3.0% |
Move from last month by line: Revenue +2.5%, Labor +2.0%, Materials +2.8%, Travel +2.4%, Vehicles +2.9%. The limit is 8% either way. No line is flagged.
Tie-out
Compares each line of the report with the ledger, which is the book of record. A difference bigger than the tolerance fails. It sees any gap between the two, whatever caused it, but it cannot see a wrong figure that is in both.
Completeness
Compares the records the source delivered with the count the source system says it holds. It sees a missing file, dropped records and doubled batches, and it cannot see a wrong value on the right number of records.
Variance flag
Compares each line with last month and flags a move over the limit. It is the only check that can see a figure that is wrong in the source and the ledger alike, and it can also flag a real change, which is why a reviewer reads it.
What each check catches, for a break of 10% of the Materials line. Change the source and size in the previous tab.
| Break | Tie-out | Completeness | Variance flag | Result |
|---|---|---|---|---|
| A batch loads twiceOne batch of records is loaded two times, so the report counts it twice. The ledger is right. | Flags it | Flags it | Flags it | Run held |
| A file never arrivesThe source sends nothing, so the report has no figure for that line. The size slider is not used. | Flags it | Flags it | Flags it | Run held |
| Records are dropped on loadPart of the file is lost on the way in, so the report is short. The ledger is right. | Flags it | Flags it | Passes | Run held |
| A batch has the wrong signA batch of credits loads as charges, or the reverse. The record count does not change. | Flags it | Passes | Flags it | Run held |
| A late ledger entryA journal is posted to the ledger after the extract was taken, so the ledger moves and the report does not. | Flags it | Passes | Passes | Run held |
| The same wrong figure on both sidesA bad value, such as a rate keyed too high, is in the source and flows into the ledger too. The two agree and both are wrong. | Passes | Passes | Flags it | Run held |
- Only the tie-out sees: a late ledger entry.
- Only the variance flag sees: the same wrong figure on both sides.
- Every break above is caught by at least one check.
Checks on the arithmetic behind this page
Every check below passes for the plan and the breaks you have set.
- PassStep times add up to the total. The steps add to 0.233 h and the plan total is 0.233 h.
- PassEach step starts when the one before it ends. The schedule has no gaps or overlaps from the first step to the last.
- PassThe calendar days add up to the total. The days add to 0.233 h against 0.233 h.
- PassHours saved equal the by-hand total less this plan. 32.0 h less 0.233 h is 31.767 h.
- PassOperating profit is the sum of the lines. Report $2,910,000, ledger $2,910,000.
- PassThe profit gap is the sum of the line differences. Report less ledger is $0.
- PassA tie-out failure always holds the run. 0 lines fail the tie-out and the run is released.
- PassA completeness failure always holds the run. 0 sources fail the completeness check and the run is released.
- PassNo note clears a tie-out or completeness failure. Only a variance flag can be cleared by an explanation from a reviewer.
- PassThe run is held exactly when a blocking item is open. 0 blocking items are open.
- PassEvery failed check has one queue item. 0 tie-out, 0 completeness and 0 variance items.
- PassEach tie-out item shows the line difference. The size in the queue equals report less ledger.
9 of 9 steps are automated, so the close takes 14 min against 4.0 working days (32.0 h) by hand, a saving of 31.8 hours each close. Run released. Every source ties to the ledger, every file is complete and no line moved more than the limit.