Why the 'Virtual Close' Virtually Died
The goal of a rapid-fire wrap-up of the books fell victim to Sarbox requirements, although companies still streamline using software and improved processes.
At that point, judgments concerning the appropriate accounting for inventory, expense and revenue allocations, along with other matters, often arise, Kaplan says. Hardware and software -– along with process engineering -- help companies achieve the goals of improving these components of the last mile, increasing both control and efficiency. While the approach contains similarities to the virtual-close concept, the last-mile approach is somewhat less concerned with speed.
“The virtual close isn’t necessarily about risk reduction and efficiency, although to achieve it you normally need to have integrated systems (and) streamlined processes,” Kaplan says. The virtual close “is really about having the ability to close at any time and have that top line and bottom line information.”