Perhaps it will be shocking to accountants in the future that some organizations used to take 30 days to perform a monthly close, as recent data finds the majority now take less than a week, with many saying it only takes one to two days.
This is according to a recent survey from payments automation solutions provider Bill (formerly Bill.com), which suggested that the 30-day close might be extinct. The data showed 62% take less than one week to do the close, versus 30% who said it takes between one and three weeks. Getting deeper into the specifics, the poll showed 16% saying the month-end close takes less than a day, 21% said it takes one to two days, 16% said it takes three to four days, 9% said it took five to six days, and 14% said it takes one week. Finally, 3% of organizations said they have a continuous close.
Only 16% said it takes two to three weeks, just 4% were "unsure," and only 1% doesn't close books for clients at all.
Other surveys from previous years show that the average time it takes to perform the monthly close has been going down gradually. According to accounting automation solutions provider
The Bill survey suggested that this improvement could be linked to technology, specifically automation. It noted, for example, of that 3% who do a continuous close, firms experienced with automation more often report a continuous close when compared to firms new to automation.
The survey found, overall, there was widespread enthusiasm for automation. The data found that 77% said they would benefit from combining AP, AR, spend, and expense management automation. They cited the main benefits as saving time, closing the books faster, and putting client data in one place. Additionally, one in two say that a unification will ensure a greater level of accuracy. Meanwhile, for those offering CAS, AP, and expense management, 61% agreed that automation enables them to provide services they could not offer otherwise.
"Automating manual tasks represents an important step and is becoming more table stakes at this point. Firms that simplify their technology stacks can become even more efficient. Each improvement increases the opportunities for deeper client advisory services and more profit," said Kevin Au, vice president of product management.
This in mind, many firms reported that they plan to further automate next year. The survey found 58% saying they plan to increase their investment in automation over the next 12 months; when isolated just to firm leaders, that proportion grew to 61%; and of those who already use AP and expense management automation, it was 71%.
The survey was conducted from October through December 2022. Responses were gathered from a variety of industry bodies, including Accounting Today, CPA Practice Advisor, the American Institute of CPAs, and CPA Academy. The total sample size was 1,190.
