A fast close — the ability of a company to complete its accounting cycle and close its books — is more than just a badge of honor for the finance department. It means dollars. The question is, Is your technology getting in the way or is it helping?

The best companies can close in two or three days; the laggards might take as long as 15 days.

At least that was typical until Sarbanes-Oxley. With new audit demands, requirements that the CFO and CEO sign off on the numbers, and additional government reporting regulations, it is not surprising that a recent Business Process Management Initiative survey of about 350 companies said that close times increased by at least a week in 2005, and as much as two weeks last year.

Obviously, companies would like to return to a fast close for a number of reasons.

The No. 1 benefit is that it allows you to get historical information out to your managers quickly. If it is the middle of February before the January figures are distributed, you can’t begin to take action on something for two weeks.

Not only that, but if it takes you 15 days to close, it is likely you are wasting an inordinate amount of administrative resource hours in the process, and that relates right back to costs, says Rob Kugel, senior vice president at Ventana Research.

Assuming the numbers are good, a fast close attracts equity investments before your competitors get their numbers out, adds Trevor Walker, vice president of marketing at Cartesis, an ISV that sells a financial consolidation suite called Cartesis Finance.

“The flow of capital to people buying stock will be more available, and the company will be perceived by the Street as a well-run organization,” Walker says.

Now, let’s go back to the question at hand: Is your technology getting in the way, or is it helping?

If you want to speed up the process by several days or perhaps a week, you need to migrate off legacy systems. Migration is difficult, and many companies think it is too costly, but the business folks need to understand that pulling information from legacy systems introduces tremendous complexity and its own set of costs, according to Ventana’s Kugel.

People in the finance department don’t have any idea what a tangled bowl of spaghetti there is behind the computer systems and how getting it to the screen is a huge effort, Cartesis’ Walker adds.

IT can help by making it clear to the folks in finance where there are bottlenecks in the flow of information necessary to complete the close and to perform the audit. Also, far too many companies are still stuck on spreadsheets, which usually contain far too many errors. Too often, the need to correct those errors ends up driving your close schedule.

If it is not already in place, the No. 1 piece of new software that companies should invest in is financial consolidation software, dumping their spreadsheets in the process, Kugel says.

High-performance hardware helps. For example, Cartesis Finance now runs on HP Integrity servers.

Walker is also a big fan of Microsoft SQL Server 2005, telling me that its automated real-time OLAP mechanism prevents it from having to rely on batch processing.

Getting IT and the finance department working together can help drive the success of your business in subtle ways. If your company hasn’t realized that yet, it is about time it woke up.