Agree when the month is ready to review
A close begins when the period's source activity is complete. Collect bank and card statements, payment processor reports, invoices, bills, payroll reports, and documents for unusual transactions. Decide who provides each source and who reviews the result.
A close date is useful only when missing information is visible. Keep a list of open items with an owner instead of marking the period finished while questions remain.
The ten checks to complete
Work through the accounts in an order that makes errors easier to trace. You can combine steps for a simple business, but a new payment platform or financing account may mean adding checks to the list.
- 1. Confirm all bank and credit card statements have been received.
- 2. Capture missing transactions and check for duplicate imports.
- 3. Reconcile cash and card balances to the statements.
- 4. Reconcile payment processors, fees, refunds, and payouts in transit.
- 5. Review unpaid customer invoices and unapplied receipts.
- 6. Review vendor bills, unpaid expenses, and relevant accruals.
- 7. Match payroll expense and liabilities to payroll reports.
- 8. Confirm loans, fixed assets, inventory, and owner activity where relevant.
- 9. Review the profit and loss statement and balance sheet for unusual movements.
- 10. Record adjustments, resolve open issues, and save the reviewed month-end package.
Do not rely only on the profit and loss statement
A missing loan payment split, an old unpaid invoice, or a payroll liability posted to the wrong account may leave the profit and loss statement looking reasonable. The balance sheet and supporting schedules help reveal problems that expense categories alone cannot.
Compare actual results with the prior month and any budget you use. Ask what changed in revenue, gross margin, operating costs, and cash. Investigate a material movement rather than assuming software categorization is correct.
Write down unresolved exceptions
Not every question will be resolved on the first pass. Record which transaction or balance is affected, what evidence is missing, who needs to respond, and whether the issue prevents the period from closing. The reviewer should decide which matters are material.
Document adjustments clearly. If the same problem recurs each month, fix the upstream process instead of relying on the close team to repair it repeatedly.
Save the completed package
Keep the final financial statements, reconciliations, supporting schedules, open-items log, and reviewer sign-off together. If a later tax adjustment changes a closed period, retain the explanation of the change.
The point of closing every month is to make the next decision easier. A stable, reviewed set of figures is far more useful than a dashboard that can change without explanation.
Sources
Requirements and product details can change. Check the linked guidance for the facts that apply to your situation.
Related reading
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General information, not personalized accounting, tax, legal, or investment advice. Have the appropriate qualified professional review decisions that depend on your circumstances.