Closing the books.
Such a difficult concept to understand across many levels for non accountants. There are many types of closure of records.
Most importantly it’s a permanent record, that cannot be altered.
The thing is organizations have many moving parts. So often documentation follows after the action. Since payment can come later than the product being received.
Most common problem is the proper paper work for the goods or services and actual counts and adjustment of inventory (work in progress and finished goods and raw materials).
So how can you “close the books” when there is so much back filling of records. When goods received, paid for, or money spent is not recorded on the official day itself. If the workload of the staff needs to be pushed for tomorrow or Transactions are done odd hours and need to be recorded as the actual day.
Inventory counts need to show where the materials go. If we spent 20,000usd in materials it should be reflected in the records.
So it takes our company 60 days to “close records” and that is because of the catch up documentation and the inventory counts.
What makes the concept difficult to understand is the amount of processes that need to be identified and tracked. We discovered uneven distribution of work. Because the problems arises when different process owners in this total process have different metrics and measurements that do not support the main goal.
Permanent records seem to be easy to understand until you talk to the people who are on the weeds and discover the main goal is distorted in their level.
The communicator then realizes the amount of information gathering and aligning they have to do and what seems so simple in a “high level over view” is not anymore when factoring all that can go wrong.
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