Five questions every finance lead should ask before revenue close
· Eleanor Marsh
Revenue close is rarely derailed by a single dramatic error. More often it is a cluster of small timing differences that nobody owned until the auditor asked. Before you finalise journals, walk these five questions with whoever posts the entries.
First: which contracts changed scope this period, and did recognition move with them? Change orders and partial deliveries are the usual culprits. Second: where is variable consideration still estimated, and who signed off the estimate? Third: are deferred balances reconciling to open performance obligations, or are they a plug?
Fourth: did any invoices go out before delivery evidence was complete? Fifth: what unusual credits or credits-to-revenue appeared, and do they reverse prior over-recognition? Answering these in writing — even briefly — creates a trail that survives staff turnover and external review.
If your team cannot answer two or more of these with evidence to hand, schedule a focused period-end review before the next reporting date rather than hoping the pattern self-corrects.