The financial close is the process that businesses go through at the end of an accounting period—a month, quarter, or year—to finalize their financial records. This is a so-called wrapping up of all the financial activities for that period to check and ensure everything is accurate and ready for reporting.
Here's what typically happens during a financial close:
The financial close gives a business a reliable snapshot of its financial standing at the end of each accounting period. By closing the books, a company ensures that every transaction, from revenue and expenses to adjustments for things like depreciation, is properly recorded and accounted for.
This process produces accurate financial reports, including the income statement and balance sheet, which help reveal the business’s performance, areas for refining costs, and strategic direction.
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