One of the initiatives for the Company is to assess whether it's feasible to shorten the close
Question:
One of the initiatives for the Company is to assess whether it's feasible to shorten the close by one business day at the end of the year.The current close period is seven business days.Additionally, the Company has decided to create a new business to start leasing cars to drivers.There is no accrual process to account for this new business' expenses.However, it is pertinent that expenses are captured as accurately and timely as possible.The primary operating costs of the new business for the current month includes $500,000 legal fees, $250,000 professional services and $60,000 office rent that is paid one month in advance.Here are a few key scenarios to consider for the Company as a whole:
a) The Company currently lacks a level of granularity in its budget.FP&A works with the business owners to develop a total expected spend for some departments but this budget is not broken down to the account level.
b) The Company currently does not have a Budget vs Actual analysis.The Accounting and FP&A team performs an actual month over month variance analysis for the Balance Sheet and P&L by Day 6 of close.
c) The current Purchase Order system is in process of being launched worldwide and the existing PO coding has been inconsistent.
d) The department and account coding on invoices have been consistently incorrect.
Please create a presentation detailing how you would
1) Develop an accrual process for the new leasing business for month end close considering the above scenarios
2) Develop an approach to create long term solutions for each of the scenarios above (a through d)