Close dates are important

It is always important to look at and manage deals towards a specific close date. Your average deal will typically close within a certain number of days and consequently, you can apply a projected close date to the deal.

Close dates allow you to manage your revenue on a monthly, quarterly, or annual basis, so you can begin the process of using close dates to manage your pipeline of opportunities and projecting your revenue and revenue growth accordingly. All processes around revenue projection are focused on deal close dates.

You need to consider what you mean by the close date. Is it the date at which you win the business (the client says “let’s do it”) or is it the date at which your revenues begin to flow? This warrants thought as it has a profound effect on how your team and your investors think of the business and is key to building confidence, You need to define and manage close dates consistently across the business.

The close date has an important psychological effect. If you are working towards a specific close date, you then are in a good position to work backward from that date to now and figure out what needs to be done to close the business both what needs to be done on your side and the client side. Of course, you need to mutually agree on these. Such analysis may determine that is simply not possible to close by the particular defined close date and consequently need to adjust the close date.

It’s good practice not to think of close dates as the last day of the calendar month. It’s human nature when hen you enter a month you think in terms of having a whole month to close a deal. Things will stretch out to the end of the month. If something goes wrong in the last few days, such as the signer of the deal is not available, this could push a deal from one month to the next. It’s far better to position the close date back towards the middle of the month which gives you extra runway should you need it to get the deal close within the month. There’s nothing more satisfying to the business and your investors when you are reliably closing deals within the month that you promise to close.

In time you want to get to a position in which you are reliably calling the close date well in advance. Its one thing calling a close date 5 or 10 days out, how do you it 30 or 60 days out? This is the importance of having your systems processes etc working well to give you that predictability.

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