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Transactional Accounting and Closing Processes Logo aicpa

  Amy Eubanks, CPA, CGMA |   Free |   2015 |   06:23 min |

A soft close focuses on information most critical for management decisions and performance measurement by matching the outputs of the finance function with stakeholders’ needs and requirements. It eliminates non-value-added time and effort, streamlines and accelerates the closing process, eliminates unnecessary information, and promotes informed analysis. This video explores the transition from a hard close to a soft close and ultimately a virtual close.

Topics covered:
  • Management accounting: Technical: Financial accounting & reporting: Transactional accounting & closing processes, Expert

21 Comments/Reflections

Imalka Thushari Gunawardena

Imalka Thushari Gunawardena Jun 2022

Quite interesting presentation. Virtual close may not be for every organization, but it is important for every organization to improve efficiency and remove non-value adding process around the close process.
Presentation provided some good suggestions to improve the efficiency  such as simplify intercompany, reduce manual journals entries, add useful KPI in reporting etc. These will bring some quick wins for any organization.

Thozama Tshisa

Thozama Tshisa Apr 2020

Very interesting article on moving away from hard close accounting process to virtual close process which will provide u with on-time information on demand which will the replaces the old month-end process were you could only have the required reports of useful information once the moth-end close has been completed.

The Internet-Of-Thing (IOT), Artificial Intelligence (AI) and Robotic Processing Automation (RPA) makes virtual close very possible, I am currently heading up a project to implement a new ERP (Business Central 365) that encompasses an AI and RPA functionalities, this will definitely allow us to perform virtual close processes. The system also has Power BI add-on which allows us to customize our reports and automate reports and produce those reports in a split of a second, definitely we are few months away from virtual close.
Robert Smith

Robert Smith Mar 2020

Overall this is a good video for summarising the common sense process improvements to executing efficient month end closing.
I think that there is a risk that fancy titles of "soft-close" and "virtual-close" are applied to describe an efficient process that should be followed. Rather than these terms I personally believe the adoption of a continuous improvement mindset to all processes is more appropriate.
I suppose I gained a knowledge of how the terms "soft-close" and "virtual-close" are applied. This will allow me to be more conversant with people who are managing the close process on an ongoing basis. In this respect my learning objective was met.

I don't know that there will be any wider impact on my team, organisation or career other than reasserting my belief that all processes and process owners should look for continuous improvement.
Pauline Gordon

Pauline Gordon Nov 2019

This video is a very good idea, but realistically there is no software available currently that offers this kind of solution where everything is integrated to a level that would enable a softclose, so a Virtual close would not be on the horizon for quite a few years.

Most companies have Software where nothing talks and as accountants we rely on excel too much for this reporting.   It would be a nice thing on the wish list for most companies, but thinking along the International company I work for this would be verging on impossible for a soft close currently as there would need to be lots of uniform processes worldwide as no two teams work the same way.

It is great for smaller to medium sized companies to have this as I think that it is easier to access information and to have everything uniform would ensure a smooth close with the data quickly to hand.
Gianluca Micalella

Gianluca Micalella Oct 2018

Interesting presentation: As the author indicate, not all organisations can envisage moving to virtual closures. 
This is because of the size, of specific cycles ran only at certain periods (month-end), the complexity to redesign every aspects of processess (departments)…but surely enhancements can be obtained in implementing one of more of the elements presented in order to develop more efficient and business partners-oriented financial reporting teams