Month-end close for a small business: a practical 10-step process

Post bank, card, processor, payroll, invoice, bill, loan, and owner transactions through the cutoff date. Confirm feeds are complete rather than assuming a connected account imported every transaction.

Reconcile each bank and credit-card account to the official statement. Investigate differences instead of plugging them to a suspense account.

For Stripe, PayPal, marketplaces, and other processors, tie gross sales, refunds, fees, disputes, reserves, and net bank deposits to settlement reports. Net deposits alone are not a revenue ledger.

Check aged receivables for collection issues and stale credits. Review unpaid bills for duplicates, old balances, and expenses that belong in the month even if they have not yet been paid.

Tie payroll registers to wage expense, employer taxes, benefit accounts, cash withdrawals, and payroll liabilities. Investigate off-cycle runs and corrections.

Identify purchases that should be capitalized under the company's accounting and tax policies, record depreciation or amortization where appropriate, and release prepaid expenses into the period they benefit.

Separate loan principal from interest, reconcile credit facilities, confirm tax-payable balances, and classify owner contributions, distributions, shareholder loans, and equity transactions correctly.

Accruals, deferrals, reclasses, and unusual entries should have a clear explanation and support. Material journal entries should be reviewable by someone other than the person who prepared them.

Compare revenue, gross margin, payroll, major expense lines, cash, receivables, payables, and debt to the prior month and to plan. Unexpected movement is a prompt to investigate, not automatically an error.

Publish the P&L, balance sheet, cash view, and any management schedule the company actually uses. Retain reconciliations and the exception list, assign unresolved items, and lock or mark the period reviewed so later changes are visible.