Reducing the Lead-Time of the End of Month Financial Closing Process

Abstract

The end of month financial closing process is a time consuming and challenging task for most organizations. Being able to minimize the amount of time invested during the end of month closing process, and instead have the accounting department dedicated to more value add activities, is a priority across all types of industries. The methodology of DMAIC (Define, Measure, Analyze, Improve and Control) was used to reduce the lead-time of the end of month process in a Pharmacy Benefit Management company. It was found that by standardizing the data gathering process and establishing a more robust procurement process, the lead-time was reduced by 25%. Key Terms ⎯ Cycle time, Instant close, Lean, Six Sigma.