REPORTING PERIOD

AND
FAST CLOSE PROCESS
Joanne N. Tano
February 2021
REPORTING PERIOD/ ACCOUNTING YEAR

ACHIEVING A FAST CLOSE

IMPROVING SPECIFIC FUNCTION

AREAS TO ACHIEVE FAST CLOSE

WHAT WILL
OTHER PRACTICES
YOU LEARN:
 REPORTING/ACCOUNTING PERIOD

a fixed period of time, consisting of 12 months, for

which a company or organization reports financial
performance

TYPES OF REPORTING PERIOD

REPORTING • CALENDAR YEAR (CY)

PERIOD accounting period of 12 months that ends on the last

day of December

• FISCAL YEAR (FY)

ends on the last day of any month other than
December
SOURCE: VIRGINIA P. LIM, DICTIONARY OF TERMS AND PHRASES IN TAXATION
 COMPARISION
FISCAL YEAR
can start and end at any month
EXCEPT on Dec. 31
avoidance of tax burdens and tax
and audit season; finances
harder to make an accurate
comparison
C Corporations (flexible)
VS CALENDAR YEAR
starts on Jan. 1 and ends on Dec. 31
normal life activities due to
simplicity of accounting affairs
easier to make financial comparison
Sole proprietorship , partnerships,
limited liability companies, s
corporations all government bodies
(automatic)
CHANGE OF ACCOUNTING YEAR
(from CY to FY and vice versa)

HOW?
Documentary Requirements
• Letter request addressed to the RDO
• Duly filled-up BIR Form No. 1905
• Certified true copy of the SEC Amended
By-Laws showing the change in accounting
period
• Sworn certification of non-forum shopping
• A sworn undertaking by a responsible
officer of the taxpayer,
 IAS 1 PRESENTATION OF FINANCIAL STATEMENTS
set of condensed financial statements for a period of less than a year

INTERIM PERIOD
• monthly
• quarterly (most common)
• semi-annually

PAS 34
INTERIM presents the minimum content of the interim FS

REPORTING
• condensed statement of financial position
• condensed statement of comprehensive income
• condensed statement of changes in equity
• selected explanatory notes
INTERIM REPORT:
WHO AND WHEN?
PAS 34 SEC AND PSE
• does not mandate which entities should be • requires publicly traded entities to submit a quarterly
required to publish interim reports but, report on SEC form 17Q,
• encourages publicly traded entities to publish • within 45 days after the end of each of the three
semi-annual condensed FS, not later than 60 days quarters
after the end of interim period

PURPOSE
• MORE TIMELY REPORTING

• UNDERSTAND TRENDS AFFECTING THE BUSINESS

 FAST CLOSE

COMPLETE THE
TASKS EARLY JOURNAL ENTRIES
IMPROVEMENTS
CENTRALIZING
ACCOUNTING

SPECIFIC FUNCTION AREAS

IMPROVEMENTS
STREAMLINE THE
FINANCIAL STATEMENTS
 FAST CLOSE:
COMPLETING THE TASKS EARLY
FINANCIAL ERRORS COMMISSIOM

PAYROLL ACCRUAL BILLABLE HOURS

BAD RESERVES BANK RECONCILIATION

DEPRECIATION INTEREST EXPENSE

REBILLABLE EXPENSE ACCRUED VACATION TIME

ACCOUNT RECONCILIATION
 FAST CLOSE:
CENTRALIZING ACCOUNTING

PROBLEM: MULTIPLE DIVISIONS

SOLUTION: THE NEED TO CENTRALIZE ACCOUNTING FUNCTIONS

• workflow software

ISSUES WITH ACCOUNTING CENTRALIZATIONS

• massive system changes
 FAST CLOSE:
STREAMLINE THE FS

PROBLEM: TROUBLE WITH COMPREHENSIVE FS

• include operational information in the FS package
• release a different set of FS to each manager

SOLUTION: USE DELAYED INFORMATION RELEASES

 FAST CLOSE:
JOURNAL ENTRIES IMPROVEMENTS

PROBLEM: THE JOURNAL ENTRY PROBLEM

• no standard list of entries
• no one person assigned control over

SOLUTION : REDUCE THE NUMBER OF JOURNAL ENTRIES

• use recurring entries
• define accounts
 FAST CLOSE:
SPECIFIC FUNCTION IMPROVEMENTS

PAYABLES

• Record Accruals 2. Minimize Invoice Approvals

• create a contract 3. Pay Based on Purchase Orders
summary file
4. Use Procurement Cards.
• track supplier billings
on a trend line 5. Use a Web Portal
 FAST CLOSE:
SPECIFIC FUNCTION IMPROVEMENTS
INVENTORY RECORD ACCURACY

1. Install inventory Tracking Software 6. Verify Units of Measure

2. Create Rack Locations 7. Pack the Parts
3. Lock the Warehouse 8. Count and Load the Inventory Data
4. Consolidate Parts 9. Cycle Count
5. Assign Part Numbers 10. Audit the Inventory
11. Issue Bonuses
 FAST CLOSE:
SPECIFIC FUNCTION IMPROVEMENTS

PAYROLL
1. Commission Calculations

2. Unpaid Wages Accrual

 FAST CLOSE:
SPECIFIC FUNCTION IMPROVEMENTS

BILLING

1. Issue Invoices Early

2. Put Resources on Invoice Issuance
3. Do Not Retype Information
3. Use Special Invoice Templates
CONSIDER THE USE OF A SINGLE ERP
SYSTEM ERP
EMPLOY CLOUD-BASED COMPUTING
IMPLEMENT CUTOFF DATES
IMPLEMENT A FISCAL CLOSE
GOVERNANCE PROCESS
COMPLETE GENERAL LEDGER
RECONCILIATIONS
IMPLEMENT A COMMON CHART OF
ACCOUNTS
IDEFINE BUSINESS RULES FOR
ESTABLISHING COST CENTER
DEFINE ALLOCATION RISKS
IMPLEMENT AN INDIRECT COST
ALLOCATION METHODOLOGY
ADDRESS SPREADSHEET RISKS AND
IMPLEMENT CONTROLS
AUTOMATE THE CONSOLIDATION
PROCESS
INCLUDE THE PEOPLE WHO IMPACT
THE CLOSE
CREATE CONSISTENT CLOSING
SCHEDULES
DEVELOP BUSINESS RULES FOR POST-
CLOSING ENTRIES
Thank You!