Sequencing

A task list without dependencies is a checklist. A task list with dependencies is a plan you can schedule, monitor and improve. This lesson turns Contoso's close tasks into a dependency chart, finds the critical path, and shows why the critical path, not the number of tasks or the effort of the team, decides how long the close takes.

Building the dependency chart

For each task record three things: its duration, its predecessors (tasks that must be complete before it can start), and whether it can run in parallel with others. Use realistic durations from past closes, including waiting time for reviews. Then draw the chart. The simplified Contoso chart below has thirteen tasks; the real one has many more, but the logic is the same.

Finding the critical path

The critical path is the longest chain of dependent tasks from start to finish. Its length is the shortest possible close, no matter how many people work in parallel. Walk each chain to M and add the durations. A-B-E-G-H-I-M takes 2 + 6 + 4 + 3 + 4 + 3 + 6 = 28 hours. A-B-F-K-M takes 20 hours. A-B-L-M takes 18. A-C-J-K-M takes 15. The longest chain is A-B-E-G-H-I-M at 28 hours: that is Contoso's critical path.

Three consequences follow. First, speeding up a task off the critical path does not shorten the close: making FX valuation (J) twice as fast saves nothing, because J is not on the longest chain. Second, every hour saved on the critical path shortens the close, until another chain becomes the longest. Shortening AP invoice posting (B) by two hours brings the close to 26 hours. Third, a delay on the critical path delays the whole close one for one, so those tasks need the most experienced owners and the earliest warnings.

Ways to shorten the critical path

• Start earlier: post accruals for known costs before day 1, so E needs only the last invoices.
• Split tasks: settle orders for plant 1710 while plant 1720 finishes variances, if the dependency allows.
• Remove waiting: replace an email approval with a task-list approval so the next task starts on completion.
• Automate: schedule jobs to start when predecessors finish rather than when someone remembers.
• Move work out of the close: continuous GR/IR clearing during the month reduces F and K at month end.

Several company codes, one path

With more than one company code, the chart gets wider rather than longer. Company code 1810 in Toledo has its own invoices, billing and statements, and joins 1710's chain at intercompany reconciliation and at group reporting. Draw each company code's tasks, then the links between them, and recalculate. It is common for the critical path to run through the smaller entity: one late intercompany invoice in 1810 can hold up the reconciliation that the group statements need. When Wave 2 adds company code 1910 in Monterrey, with MXN as local currency and its own valuation run, the chart grows again and the path must be recalculated before the first close that includes it.