European firms are reducing the time it takes to close their books, but still lag far behind their US rivals who manage to produce financial reports twice as fast.

That is according to a new whitepaper from business performance management (BPM) software specialist Cartesis which argues greater use of automated budgeting and reporting systems and wider adoption of best practices are required to ensure firms close their books faster while still meeting stringent accountancy regulations.

The whitepaper features a study of 527 large companies carried out by BPM consulting network BPM International, and found European companies are closing their books faster than ever with 60 percent having reduced the time taken to produce year-end reports by an average of nine days, and over 55 percent having shortened the time taken to sign off audits by twelve days.

In contrast the impact of Sarbanes-Oxley legislation has slowed the reporting processes for three quarters of US firms by an average of 21 days. However, European firms still take an average of 58 days to close year end books compared to 28 days for US companies.

James Fisher, director of product marketing at Cartesis, said the difference in reporting speeds gives US firms a competitive advantage. "The ability to fast close means you can redeploy finance staff to work on more valuable activities, like business analysis," he said. "It also gives decision makers access to accurate financial data quicker and creates the impression financial processes are sound."

He added that firms should treat shortening book-closing processes as a long term project incorporating both adoption of accounting best practices and investment in BPM technologies that automate many financial processes.