T+5: how to close the month on the 5th business day, without overtime
According to APQC data (over 11,000 companies), the median company prepares consolidated monthly statements in 6 calendar days. Our clients usually start at T+14 or later. We routinely take them to T+5, without burning the accounting team out.
Fast monthly close isn't a speed contest. It's the mechanism that lets May decisions get made on May data. T+14 means half the month is already decided «in the rear-view mirror». T+5 buys back ten premium days.
What blocks the close
- Waiting for invoices from suppliers (3-7 days)
- Manual reconciliation by entity (2-4 days for multi-entity)
- Approval workflows that kick in at the end
- Reclassifications that start post-factum
- Inter-company eliminations in manual Excel
None of these five is solved by «working faster». All of them are structural. The fix is in process design, not in the team’s schedule.
Seven principles
01. Estimate, then adjust
90% of accruals are run-rate based. Don't wait for invoices, post the estimate. 95% accuracy in 5 days beats 100% in 14.
02. Daily reconciliation
Bank rec daily, not month-end. Inter-company weekly. A week-1 break gets fixed in week 2, not in month +14.
03. Hard cutoffs
Day 3 of the month, no exceptions. Late invoice? Next period. No «we'll squeeze it in by Friday».
04. Standardised chart of accounts
One chart of accounts across all entities. If «office supplies» is in 631 in one entity and 685 in another, consolidation is a manual nightmare.
05. Automatic eliminations
Inter-company invoices tagged at creation, auto-eliminated at close. Not Excel formulas, not VLOOKUPs. ERP integration.
06. Soft close, progressively
Each business day a piece of the close. Day 1: bank rec. Day 2: AP. Day 3: AR + accruals. Day 4: inter-co + reclasses. Day 5: review + sign-off.
07. Materiality threshold
Anything below 0.5% of revenue doesn't block close. Found a $400 break? Don't stop, adjust next month. This is our internal threshold for management close, not a requirement of any standard: the level below which a break doesn't change a management decision is set by each company itself. On its own, a threshold won't speed up the close; it works only together with the other six principles.
T+5 isn't speed. It's May decisions made on May data.
The first 30 days
Audit of the current process: where time is lost. Map dependencies: what blocks what. Quick wins: 3-4 points where about 2 days can be cut in total. SOP document: locks in the new hard cutoffs. From T+14 to T+9 in the first full cycle. From T+9 to T+7 in the second. From T+7 to T+5 in the third. Six months is the typical horizon.
How this scales to a group
T+5 per entity, T+7 for the group. One day for consolidation plus one day for group-level review. If you have 4 entities moving at different speeds, the group closes where the weakest link is.