Best organizations report consolidated financials in 4 days

Consolidated financial statements enable organizations with a parent company and subordinate reporting units (e.g., subsidiaries, regional operations, or multiple locations) to report their finances as a single enterprise for creditors, investors, operational leaders, and other stakeholders. Preparing these statements can be a complicated endeavor, but completing them in a timely way is critical.

The cycle time in days to complete monthly consolidated financials measures the number of calendar days (including weekends) that elapse between running the initial monthly business entity trial balance and completing the agreed-upon monthly business entity consolidated financial statements. Finance leaders should track their company’s performance on this measure to ensure that the process for creating consolidated statements is optimized for timely and accurate reporting.

APQC’s data for this measure shows that the fastest organizations are able to complete the regular consolidated financial statements in four days, while the slowest organizations reported taking more than twice as long — 10 days.

The risks of slow performance

Organizations that take too long to complete their monthly consolidated financial statements run the risk of missing key opportunities for analysis and problem-solving. Even if finance discovers significant issues from the previous month’s statements, operational leaders won’t have much time to do anything about them in the following month if they don’t get the statements in a timely way. It’s easy to see how the damage can compound from month to month as teams scramble to address issues that should have been discovered earlier.

Timeliness is important, but organizations also take risks when they work too quickly. Given too little time, operational leaders will struggle to complete their accruals, deferrals, adjustments, or other key accounting entries. The resulting consolidated financial statements will not present an accurate picture of the business.

The optimal cycle time for a company will depend on factors like its size, industry, and complexity. For that reason, APQC recommends benchmarking performance internally, within your industry, and relative to organizations of similar size. Benchmarking from these different vantage points helps to provide a more holistic picture of finance’s performance.

How to improve

Excessive spreadsheet use, manual touchpoints in the process, and human error all increase cycle times for completing monthly consolidated financials. The good news is there are proven strategies for improving the process and decreasing cycle times. The following are three of the most impactful strategies.

  1. Establish robust governance structures

Part of the challenge of completing the monthly consolidated financial statements is that large, globally distributed companies typically leverage multiple general ledgers and financial planning systems. While there’s no way around region-specific compliance requirements, a company should aim to standardize and centralize the reporting process as much as possible — especially with regard to the chart of accounts (COA). A lack of standardization and centralization for the COA means reporting will take longer, especially if different business units continually add new accounts to their COA.

  1. Leverage integrated technology

Manual approaches to data collection and a lack of integration between systems both lead to longer cycle times for the completion of consolidated financial statements. Simplifying data collection through cloud-based tools addresses both of those concerns.

Cloud-based ERP tools provide visibility across an enterprise and keep each individual and department accountable for any delays in preparing financial statements. These tools automatically update and share financial data across multiple systems. That helps prevent the kinds of errors and delays that occur when finance teams prepare financial statements manually.

  1. Train and empower people

Before asking finance teams to reach for faster cycle times, work with them to better understand how much time they realistically need. In addition, ask if anything might be causing process delays. While it’s important to complete the statements in a timely way, it’s also important to give teams enough time to get the work done so the financials don’t have missing or incomplete information. To ensure greater consistency and standardization, provide training and resources like desktop guides that lay out how the work is to be carried out.


Adapted from: “Best Organizations Report Consolidated Financials in 4 Days: Metric of the Month”, by Perry D. Wiggins, CPA, CFO, secretary, and treasurer for APQC, a nonprofit benchmarking and best practices research organization based in Houston, published on CFO News on 06 July 2022.

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