Month-End Close Checklist
A month end close checklist for small finance teams: cut-off, reconciliations, accruals, review and reporting, in order, with a clear owner for each step.
- Typical schedule monthly
- The checklist 5 sections, 23 items
- Variables
{{month}}{{entity}}
Use this checklist every month, once the last transactions of the period are in. It suits small companies and agencies that close the books in-house or together with an external bookkeeper, and that want the same steps done in the same order every time, whoever is on duty.
Who owns it
One person owns the close. Usually that is the controller, the finance lead or the bookkeeper. They assign the individual steps, such as payroll entries or the sales cut-off, but they decide when the period is ready to lock. A second person reviews the reconciliations and the final reports before they go to management.
Common pitfalls
- Closing on an unreconciled bank balance. Every other number depends on cash being right. Reconcile the bank accounts first, not last.
- Accruals from memory. Keep a running list of recurring accruals (rent, utilities, unbilled work) so nothing depends on one person remembering.
- Leaving the period open. If the period is not locked in the accounting system, late postings change reports you have already sent.
- No variance review. A balance sheet that ties out can still be wrong. Compare the month to budget and to last month, and explain the large movements.
Schedule the run for the first working day of each month. Every close then leaves an audit trail of who reconciled and approved what. Adapt this to your jurisdiction and your accounting system; it is a practical checklist, not accounting or tax advice.
The checklist: Month-end close {{month}} for {{entity}}
Cut-off
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Confirm all sales invoices for
{{month}}are issued and posted -
Confirm all supplier invoices received up to the cut-off date are entered
Chase approvers for invoices still waiting in the inbox or the approval tool.
-
Confirm expense reports and card transactions for
{{month}}are submitted and coded -
Post payroll journals for
{{month}}, including employer social charges
Reconcile
-
Reconcile every bank account to the bank statement balance on the last day of
{{month}} -
Reconcile company credit cards and payment provider balances (e.g. Stripe, PayPal)
Payouts, fees and refunds often sit in a clearing account. It should net to zero or to known items.
-
Reconcile accounts receivable ledger to the aged debtors report
-
Reconcile accounts payable ledger to the aged creditors report
-
Reconcile VAT or sales tax control accounts to the tax report
-
Clear or explain every item in suspense and clearing accounts
Adjust
-
Post accruals for costs incurred but not yet invoiced
Work through the standing accrual list, then ask budget owners about anything new.
-
Post prepayments and release the portion that belongs to
{{month}} -
Post deferred revenue releases for subscriptions or advance payments
-
Post depreciation and amortisation for
{{month}} -
Revalue foreign currency balances at the month-end rate optional
Only needed if you hold bank accounts, receivables or payables in other currencies.
-
Post intercompany charges and confirm both sides agree optional
Review
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Review the trial balance for unusual balances, such as negative cash or credit balances in expense accounts
-
Compare profit and loss to budget and to last month, and write a short note on each large variance
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Second person reviews reconciliations and journals posted during the close
-
Lock or close
{{month}}in the accounting system
Report
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Produce management reports for
{{month}}: P&L, balance sheet and cash position -
Send reports and variance notes to management or the board
-
Record open issues and process improvements for next month's close
Checklist as Markdown
Frequently asked questions
How long should a month-end close take?
It depends on volume and on how much happens during the month. Small companies that reconcile the bank weekly and code expenses as they arrive can often close in a few working days. If the close keeps slipping, move recurring work such as bank reconciliation out of the close and into a weekly routine.
What is the difference between month-end and year-end close?
The month-end close produces reliable management figures. The year-end close does everything in the month-end close and adds statutory work, such as inventory valuation, provisions, tax calculations and preparation for the auditor or tax adviser. A clean month-end close every month makes the year-end much shorter.
Who should review the month-end close?
Someone who did not prepare the entries. In a small team that might be the CEO or an external accountant reviewing the reconciliations and the variance notes. The point is a second pair of eyes on the numbers before they are used for decisions.
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