Lesson 5 of 5
Sign-off
10 min
Listen to this lesson
A cross-process close needs its own sign-off, separate from the functional sign-offs of finance, controlling and logistics. Each of those says "our part works." The close sign-off says something they cannot: the parts work together, in order, within the time the business needs, and the resulting numbers reconcile. It is signed by the finance process owner, with the logistics and controlling owners confirming their tasks.
Close sign-off criteria
- Completeness: every task in the task list is complete or formally skipped with a reason.
- Order: no task started before its predecessors were complete (task list or log evidence).
- Reconciliation: subledgers to G/L, GR/IR, intercompany 1710/1810, material ledger to G/L inventory, margin analysis to the P&L, all with zero unexplained difference.
- Statements: trial balance and statements reviewed and signed by the reviewers named in the calendar.
- Duration: the close finished within the target (for Contoso, five working days at go-live) and the critical path is documented.
- Issues: every issue from the cycle has an owner and a decision; none of high severity open.
Evidence for the signature
Every criterion needs evidence that someone else could check. Completeness and order come from the task list itself, or from the close spreadsheet with actual start and end times if Contoso is still running without a tool. Reconciliations come as workbooks with both sides, the difference and the explanation. Reviews come as dated approvals by the named reviewers. Duration comes from the first and last task timestamps. Keep all of it in one place per cycle, linked from the sign-off record, so the auditors' walkthrough of the first live close is a matter of opening a folder rather than reconstructing a month.
Tracking improvement across cycles
One good mock close proves the close can work once. The goal is a close that works every month and gets better. Track the same small set of measures for every cycle: mock close 1, mock close 2, the dress rehearsal and the first live closes. Durations alone can mislead, so pair them with quality measures.
| Measure | Mock 1 | Mock 2 | Dress rehearsal | Target |
|---|---|---|---|---|
| Close duration (working days) | 6.0 | 5.0 | 4.5 | 5.0 at go-live, 4.0 by year end |
| Critical path (hours) | 33.5 | 29.0 | 27.5 | Below 28 |
| Issues logged | 41 | 17 | 6 | Falling each cycle |
| High-severity issues open at end | 3 | 1 | 0 | 0 |
| Unexplained reconciliation differences | 4 | 1 | 0 | 0 |
| Tasks late against plan | 12 | 5 | 2 | Below 3 |
Contoso's close scorecard across cycles (illustrative figures).
- Mock close 1BaselineFirst real durations; many issues; critical path found
- Mock close 2Fixes provenOn-path issues fixed; duration and issues down
- Dress rehearsalGo-live rehearsalFull close on the dress rehearsal data; sign-off rehearsed
- First live close in CMPReal closeCompared with the rehearsal; hypercare support on hand
- Wave 2New entityCompany code 1910 added to the template; mock close for the new entity before its first live close
The scorecard also tells you when to stop rehearsing. When two consecutive cycles meet the duration target, reconcile cleanly and show no high-severity issues, the close is ready. Keep the scorecard after go-live: the first live closes are measured the same way, and when Wave 2 adds Alternadores del Norte (company code 1910, MXN), its tasks join the template and the critical path is recalculated before its first close. A new entity is a change to the close, and it gets a mock close of its own.
What would you do?
The dress rehearsal close finishes in 4.5 days, inside the 5-day target, but the intercompany reconciliation between 1710 and 1810 shows a $12,600 unexplained difference. The steering committee wants Dan's signature today. What should he do?
- The close sign-off covers what functional sign-offs cannot: the parts working together, in order, on time, reconciled.
- Criteria: completeness, order, reconciliations, reviewed statements, duration, issues owned.
- Track a small scorecard of duration and quality measures across every cycle.
- A new entity such as Wave 2's company code 1910 is a change to the close and gets its own mock close.
Check your understanding · not graded
Lesson check
1. What does a close sign-off add to functional sign-offs?
2. The close met its duration target but a reconciliation has an unexplained difference. Sign?
3. Why pair duration with quality measures on the scorecard?
4. When does Contoso consider the close ready for go-live?