Financial close represents the conclusive phase in a fiscal period where a company finalizes all its monetary transactions, including payments, contracts, and the issuance of securities. Upon reaching this point, the company can prepare and release its financial statements.
The process of financial close involves crucial steps, such as finalizing financial statements, obtaining approvals from investors and lenders, executing transactions, and officially concluding all financial records and transactions.
The financial close process is primarily handled by a company's finance department. This department ensures all financial records are updated and compliant with regulations. It collects, analyzes, and compiles data from various departments, prepares financial reports for the board of directors, and finalizes the financial close upon their approval.