In one of my jobs in the early 1970’s, I was amazed that a large corporation could close their books every month by the middle of the 2nd workday of the month. Here’s how they did it.
First – they had a 4/4/5 accounting calendar. Rather than use the normal monthly calendar (31 days in January, 28/29 in February, etc.), every “month” had only complete weeks and were either four or five weeks long. Every 5-6 years one of the months would have five weeks instead of four to account for the fact that 365 days is one more than 52 weeks and leap year adds yet another day. But the advantage of this type of accounting calendar is that every accounting month ends on a weekend.
Second – the accountants all knew in advance that they would be putting in some overtime on the last weekend of each month. Depending on what part of the finances they worked, some of them worked on Saturday, some on Sunday, and others put in extra time on Monday.
All the major financial systems (Payroll, Accounts Receivable, Accounts Payable, etc.) ran over that weekend and generated their month-end reports. Since salaried people were paid every two weeks, either the payroll cycle coincided with the end of the month, or it was very simple to take the prior payroll and accrue the unpaid week by taking exactly half of the prior bi-weekly payroll. So by Monday morning, every location, every division that had financial responsibility had their results for the month. During Monday morning the accountants at that location consolidated their results and put them on special sheets and sent them to the head office by courier (email and other electronic communication did not yet exist).
Finally – the accounting folks in the head office needed to put everything together for the entire company by no later than mid-day on Tuesday. For this they used a special technology known as a pegboard and “peg sheets”. The pegboard was a piece of equipment with a large flat surface and a row of spaced pegs across the top for hanging the individual peg sheets (see http://www.freepatentsonline.com/2061532.html for a patent from 1936). Each location sent in two sheets, one for their income and expenses and one for their assets and liabilities. Each type of sheet had identical rows for the various elements, two columns (name of the rows and dollar amount), and holes across the top that lined up with the pegs on the pegboard.
The head accountants would put a blank summary peg sheet on the left, then underlap all the individual ones from each location so that only the dollar amounts were showing. Then with a built in ruler they would add across each row (using an electric calculator) and enter the totals in the summary peg sheet. They could check their math by doing the appropriate calculations on the summary sheet to see if the totals were proper.
If this sounds a lot like a spreadsheet, it is. But remember that this was the early 1970’s. Personal computers had not yet been invented. The first computer spreadsheet, VisiCalc, was not invented until 1979 and the IBM-PC was not available until 1980. But VisiCalc was essentially designed to mimic the rows and columns of the accounting pegboard as well as include the math formulas such as those used by the accountants to add all the columns and put the results in the first blank sheet. (An aside, a friend of mine from college was the president of VisiCorp from 1980 to 1984.)
But this was the technology of the day. And combined with the 4/4/5 accounting calendar which gave the accountants the weekend time to get everything done, it enabled a large corporation to close their books every month by mid-morning on the 2nd workday – something that even today many companies are unable to do.