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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

17 Comments/Reflections

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

John Litchfield

John Litchfield Sep 2018

An informative presentation to think about current processes and how soft/virtual close can shorten the month end close to provide faster reporting analytics.
Alan Newell

Alan Newell Sep 2018

  Soft closing has the advantage of management seeing the KPI's early in the cycle and can therefore improve the decision making process this must be balanced with the watering down of internal disciplanes, something that other departments are not so good at
Nicholas Potter

Nicholas Potter Aug 2018

As someone who works very much at the traditional hard-close part of the reporting cycle, I am aware of the deficiencies in this method of reporting re its usefulness to those who are running the business.  That said, I feel that the traditional hard-close part of the reporting function will always be with us due to the statutory filing requirements and the "tax needs" of investors.

I have endeavoured to introduce virtual reporting in the organisation where I work but am aware that this needs sponsorship from the owners of the business and a investment of their resources (time and money) before this can be effective.
John Cope

John Cope Jul 2018

Short, concise and informative presentation that certainly gave me food for thought with regard to how the close process might be made more efficient. I was interested by the comment regarding the virtual close being something that might not be achievable in the short term, particularly in smaller organisations. I would say that larger, global and multinational organisations might also encounter challenges to provide a real time financial view simply due to the number of financial transactions that will only be processed at the end of a financial reporting period (monthly invoicing to customers, review of invoicing for amounts requiring deferral or accrual under revenue recognition requirements, review of AP transactions for amounts to be moved to prepayments and also for accruing costs not invoiced in the period, etc.). Without a crystal ball, I feel virtual close might not be come a reality.