Month End Glossary

Value Add Activity

A value add activity is a process or action that directly enhances a product or service in a way that improves its value to customers.

A value add activity refers to any process, action, or operation that directly contributes to increasing the value of a product or service as it is perceived by the end customer. In the context of business and operations, these activities are critical in aligning operational efficiencies with customer satisfaction. For example, providing detailed insights during a balance sheet reconciliation process can be considered a value add activity, as it enables a clearer understanding of financial data.

One way to identify a value add activity is to evaluate whether the action would be something the customer deems essential or beneficial. For example, in a month-end close process, conducting thorough checklist reviews ensures accuracy and reliability of financial statements, both of which are invaluable to stakeholders.

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