Month-End Close Cost
A slow close isn't an accounting problem. It's an operations problem wearing accounting's clothes — and it's paid for in salary, twelve times a year.
Full guide: Month-end close checklist: a 5-day process →
Estimate based on your inputs, assuming an 8-hour day and ~190 paid hours per month. It counts salary only — not the cost of decisions made on stale numbers, which is the part that actually hurts.
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You've now seen the number from a few angles. The next question the calculator can't answer: why does your close take as long as it does?
Bring your close timeline to a Zoom review. We'll find the two or three points where the information goes missing, and what fixing them would actually take.
Request your 20-min systems review Not ready? Get the weekly playbooks insteadHow the calculation works
Cost per close = working days to final numbers × 8 hours × the share of the day the close takes × people involved × hourly cost (monthly salary ÷ about 190 paid hours). Multiply by 12 for the year, and compare with the same close done in 3 days.
Worked example: a close that takes 12 working days, pulls in 3 people for about half of each day, on S$4,500 a month. The hourly cost is about S$23.68. That is 12 × 8 × 0.5 × 3 = 144 hours, or about S$3,411 per close and S$40,926 a year. The same close in 3 days would cost about S$10,232, so the difference is about S$30,695 a year in salary alone.
Why closes run slow
- bank lines and supplier bills entered in a rush at month-end instead of daily
- sales invoices, deliveries and stock that do not agree
- accruals and adjustments that depend on one person
- reports rebuilt by hand in Excel
How to get to five days
Post transactions as they happen, reconcile the bank weekly, lock the period once it is closed, and build the reports once. Month-end shouldn’t take three weeks and record to report walk through it.
Questions
How much does a slow month-end close cost? Working days × 8 hours × share of the day × people × hourly cost, twelve times a year. A 12-day close with three people at half their day on S$4,500 costs about S$40,926 a year in salary.
How long should a month-end close take? Many small businesses can reach five working days once transactions are posted daily and the bank is reconciled weekly.
Is the calculator free? Yes, with no signup. It gives three calculations, then offers a free 20-minute review if you want to go further.
