Virtual Close: Prospects And Problems

Abstract

The Internet and web enabled technologies have affected numerous accounting processes.  Closing of the books at the end of the period, especially fiscal year, is one such accounting process.  Closing of the books used to take weeks and months before the advent of the Internet.  The accelerated process of closing of the books using the web based technologies is called virtual close.  Virtual close is considered to be the ability to close company’s books quickly and generate financial statements.  Virtual close can also be viewed as a minimum distance between business activity and reporting of such an activity.  However, the quickness or distance has not been defined precisely.  The idea of virtual close pioneered by Cisco gained currency in the late 1990s.  However, later the rush to accelerate the closing process has slowed down considerably.  This paper initially explores the history of virtual close.  Next, the lessons learned in virtual close and costs and benefits associated with virtual close are analyzed and evaluated.