Frozen close recovery case study

Frozen Close Recovery Case Study

A $70M company's close cycle had been stuck for 6 months — December year-end not finalized in June, audit fieldwork postponed twice, board reporting on hold. Fourteen weeks of forensic recovery later, the books were current, audit-ready, and a sustainable close cadence was operating.

Client profile: Composite case study based on a $70M B2B services company on NetSuite. Senior accountant departed mid-year-end close; replacement struggled; close went stale; reconciliations broke; new accruals piled on top of unfinished prior period. By month 6, the situation was acute.

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Company context Before — what was actually broken What Ledger Summit implemented Forensic close recovery mechanics Implementation timeline Measured results

Company context

The client is a $70M B2B services company on NetSuite. The senior accountant who owned the close left during year-end; the replacement struggled with the system, the policies, and the volume. December close didn't finalize. January and February were partially closed. By March, prior-period entries were being booked alongside new entries; reconciliations broke; sub-ledgers diverged from GL. By June (when we engaged), 6 months of close were unfinalized, audit was twice postponed, and the board hadn't seen financials since November.

CFO mandate: get current. We were brought in for forensic close recovery — investigate, document, fix, restart cadence.

$70M B2B services on NetSuite
Senior accountant departed mid-year-end
December close not finalized
January–May partially closed
Sub-ledger divergence from GL
Audit twice postponed
Board reports last issued November
Lender quarterly compliance overdue

Before — what was actually broken

6 months of unfinalized close
New entries booked alongside prior-period (commingled)
Sub-ledger to GL divergence (AR / AP / FA)
Bank reconciliations 6 months stale
Recurring entries dropped
Accruals not properly reversed
Prior-period audit findings unresolved
Multiple period-end "snapshots" in NetSuite without sign-off

What Ledger Summit implemented

Forensic close: month-by-month investigation; entries categorized (current period, prior period, error, missing)
Prior-period adjustments: cumulative documented; cumulative-effect adjustment to opening retained earnings as needed
Sub-ledger reconstruction: AR / AP / fixed assets / payroll re-tied to GL
Bank reconciliation: 6 months rebuilt from bank statements
Recurring entries: re-established (accruals, prepaids, depreciation, payroll)
Close calendar reset: 5-day close calendar for current period
Reconciliation gates: sub-ledger and GL must reconcile before close sign-off
Reviewer routing: JE approval matrix established
Documentation: investigation memos, prior-period adjustment memos, control narrative
Audit prep: PBC list, evidence packs, walkthrough memos for delayed audit

Forensic close recovery mechanics

Phase	What happens
Triage	Inventory: which months are partial, which complete, which untouched. Document the state.
Cutoff fix	Stop new period-mixing; freeze current activity at correct period boundaries
Sub-ledger reconciliation	Roll-forward AR / AP / FA / payroll; identify divergences
Bank rec rebuild	Per-month bank reconciliations from statements
Investigation	Each unexplained variance categorized; entries documented
Prior-period adjustments	Cumulative adjustments documented; opening balance impact quantified
Recurring entries	Accruals / prepaids / depreciation re-established
Close cadence reset	Documented close calendar for current period
Audit prep	Memos drafted; PBC list; walkthrough scripts

Implementation timeline

Weeks 1–2: Triage; state assessment; investigation plan
Weeks 3–6: Forensic close month-by-month; sub-ledger reconciliation
Weeks 7–9: Bank reconciliation rebuild; recurring entry restoration
Weeks 10–11: Prior-period adjustment documentation
Weeks 12–13: Close cadence reset; first new monthly close on schedule
Week 14: Audit prep complete; auditor walkthrough; fieldwork ready

Measured results

Metric	Before	After	Delta
Months unfinalized	6	0	—
Sub-ledger to GL variance	Material	$0	—
Bank reconciliations	6 months stale	Current	—
Cumulative prior-period adjustment	—	$280K to opening RE	—
Audit prep status	Postponed indefinitely	Ready	—
Board reports	Last in November	Resumed	—
Lender quarterly compliance	Overdue	Restored	—

Alternatives considered

Option	Time	Cost	Strengths	Weaknesses
Hire turnaround controller	3+ months ramp	$140K+ annual + recruiting	Permanent	Ramp time
Big-4 forensic engagement	12+ weeks	$280K–$520K	Brand	Cost; over-scoped
Internal-only	Not feasible	—	—	Crisis grows
Ledger Summit fractional + cleanup (selected)	14 weeks	$120K–$180K	Right-sized; fast	Maintenance ongoing

When this approach fits

$15–200M companies with stalled / stuck close
Senior accountant departure or role-failure trigger
Audit / lender / board pressure for current financials
NetSuite, Sage Intacct, or comparable GL
Existing accounting team ready to participate in recovery
Acceptance of forensic depth (not surface fixes)

Lessons learned

Stop the bleeding first. Cutoff discipline before recovery — don't mix new entries into broken prior periods.
Investigate, don't guess. Forensic discipline catches errors; assumption-based fixes compound.
Document each prior-period adjustment. Auditor will ask; memo at the time saves rebuild later.
Restart cadence before completion. Establish current-period 5-day close while finishing prior; otherwise the next month gets stuck too.
Consider a permanent senior accountant. Recovery resolves the symptom; team capacity gap drove the issue.

Frequently asked questions

How does close get this stuck?

Usually: senior person departs, replacement struggles, time pressure causes shortcuts, prior-period entries pile on new period, reconciliations break, problem compounds.

How long does recovery take?

12–20 weeks for $20–100M companies depending on months stuck and complexity.

Do we have to restate prior periods?

Often yes — cumulative-effect adjustment to opening retained earnings is the typical approach. Auditor concurrence required.

What about the missing recurring entries?

Re-established with documented methodology; prior-period adjustment as needed.

How does this affect the audit?

Audit fieldwork delayed; opening-balance work required for findings; audit fees often higher in recovery year.

What if there's embezzlement / fraud?

Forensic discovery if findings emerge; legal counsel; insurance claim if applicable.

Can we keep our existing team?

Often yes — recovery includes team training and process documentation. Sometimes additional hires required.

What's the typical cost?

$120K–$520K depending on scope and depth required. Plus internal team time.

How does this support lender / board confidence?

Resumption of regular reporting + audit completion restores confidence. Communication during recovery essential.

Can you continue post-recovery?

Yes — fractional controller can stay on retainer to prevent recurrence and continuously improve.

Close cycle stuck and pressure mounting?

A 30-minute call walks the state and tells you the recovery timeline.

Book a free call