Lesson 1 of 5
Close across processes
10 min
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Finance owns the financial statements, so the month-end close is often treated as a finance event. It is not. A large share of the numbers in a manufacturer's statements come from logistics and controlling: inventory, goods received but not invoiced, cost of goods sold, work in process, production variances. If the warehouse posts receipts late, if production confirmations are missing, or if order settlement runs before overhead, finance closes on numbers that are already wrong. Orchestrating the close means treating it as one cross-process chain with owners in every team.
The three families of tasks
| Family | Typical tasks | Owner at Contoso |
|---|---|---|
| Logistics | Goods movement cut-off; physical inventory differences posted; billing due list complete; materials period moved; GR/IR items reviewed with purchasing | Plant managers Detroit and Chicago; Maria for billing |
| Controlling | Cost center allocations; overhead; WIP and variances; order settlement; optional actual costing; controlling period lock | Cost accountant, under Dan |
| Finance | Supplier invoices posted; accruals; depreciation; foreign currency valuation; GR/IR clearing and regrouping; intercompany reconciliation; posting periods; statements and review | G/L team and Ana in AP, under Dan |
Period-end task families for company codes 1710 and 1810.
The list is longer in practice. A real close calendar at a company like Contoso has between forty and a hundred tasks per company code, many of them small: a report to run, a balance to review, a job to check. The point of mapping them is not the count. It is to see which tasks need the output of which other tasks, because that is where closes go wrong.
How the families depend on each other
Some dependencies are obvious: settlement needs overhead, statements need settlement. Others are easy to miss. Foreign currency valuation needs all open supplier and customer items, so it waits for the last invoices. GR/IR analysis needs the last goods receipts and the last invoices. Intercompany reconciliation between 1710 and 1810 needs billing in 1710 and invoice receipt in 1810, which are two teams in two company codes. If Contoso runs actual costing later, it needs every movement and settlement of the period to be complete, and its revaluation postings must be in before inventory and COGS are reported.
- Logistics cut-offLast receipts, issues, confirmations and billing; materials period moved
- Subledgers completeSupplier invoices, customer billing, assets: all postings in
- ControllingAllocations, overhead, WIP, variances, settlement
- ValuationFX valuation, GR/IR clearing and regrouping, accruals
- Reconcile and reportIntercompany, subledger to G/L, margin to P&L, statements
Gates that hold the period
Three gates decide what can still post into a period, and each belongs to a different team. The materials period (moved with MMPV) controls inventory postings; it is usually moved at the start of the new month so goods movements go to the new period. The FI posting periods, controlled by the posting period variant for the company code, can be opened and closed separately for account types such as assets, customers, suppliers, materials and G/L accounts, so suppliers can be closed for May while G/L accountants still post accruals. The controlling period lock blocks selected controlling transactions such as allocations or settlement for a period and version. A close calendar that does not say who moves each gate, and when, will sooner or later see a gate moved too early (settlement fails) or too late (June documents land in May).
| Gate | Owner at Contoso | When it moves |
|---|---|---|
| Materials period | Logistics, with the plant controllers | First working day of the new month, after the cut-off |
| FI posting periods by account type | G/L team under Dan | Suppliers and customers closed on day 3; G/L on day 4 after review |
| Controlling period lock | Cost accountant | After settlement and allocations to margin analysis are complete |
The three gates in Contoso's close and who moves them.
What would you do?
On day 1 of the close, finance wants to start foreign currency valuation, but Ana in accounts payable still has 60 supplier invoices in her queue for the period. What should the close lead do?
- The close is a cross-process chain: logistics, controlling and finance each own tasks.
- Map every task with owner, system step, duration and predecessors.
- Finance tasks depend on complete logistics and controlling postings, not only on finance work.
- Hidden dependencies (FX valuation, GR/IR, intercompany) cause most close-day surprises.
Check your understanding · not graded
Lesson check
1. Why is the month-end close a cross-process event?
2. What must be complete before foreign currency valuation of open items?
3. Which task links two company codes in Contoso's close?
4. Which transaction moves the materials period that controls inventory postings?