Month-End Close

Definition:
The month-end close is the set of steps you run each month to make sure your numbers are accurate and ready to report. It’s the moment you stop, reconcile the records, post any needed adjustments, and produce financial statements you can trust. Do it well and you get reliable insight; do it badly and you end up apologising to clients, managers, or auditors.

Why it matters

• Gives leadership trustworthy monthly numbers to make decisions.
• Catches errors before they compound.
• Keeps books audit-ready and compliant.
• Protects cash flow and billing accuracy.
• Makes forecasting and advisory work possible.
• Core objectives of a good close
• Ensure all transactions for the month are recorded.
• Reconcile bank & card accounts to statements.
• Post necessary accruals, prepayments, depreciation and adjustments.
• Clear subledgers (AR, AP, inventory) so the GL matches detail.
• Produce P&L, balance sheet and cash flow that reflect reality.
• Review and sign off with documented approvals.

Detailed month-end checklist (use this as your baseline)
Pre-close
☐ Lock the prior period (if you use period locks).
☐ Collect all source files (bank files, payroll reports, invoices, receipts).
☐ Run preliminary P&L and balance sheet to spot anything obvious.

Revenue & AR
☐ Reconcile AR subledger to the GL.
☐ Confirm invoices issued and aging report reviewed.
☐ Post any invoice credit notes or write-offs with approval.

Expenses & AP
☐ Match supplier invoices to PO/receipts where applicable.
☐ Reconcile AP sub-ledger to the GL.
☐ Accrue expenses incurred but not yet invoiced (utilities, fees).
☐ Review credit card statements and assign receipts.

Bank & Cash
☐ Import bank statements / confirm bank feeds.
☐ Perform bank reconciliations for all accounts.
☐ Reconcile petty cash and float accounts.

Payroll & Benefits
☐ Confirm payroll posted to GL.
☐ Accrue payroll liabilities (taxes, pensions) not yet paid.

Fixed Assets & Inventory
☐ Post depreciation/amortisation entries.
☐ Reconcile asset register to GL.
☐ For inventory businesses: adjust stock counts, post COGS adjustments.

Inter-company & Other
☐ Reconcile inter-company balances and eliminate as needed.
☐ Reconcile loans, lines of credit, and shareholder accounts.

Adjustments & Journal Entries
☐ Post month-end journal entries (accruals, prepaids, FX adjustments).
☐ Add memos and attach supporting docs to each JE.

Review & Reporting
☐ Run trial balance and investigate any suspense or unreconciled items.
☐ Prepare management pack: P&L vs budget/forecast, balance sheet highlights, cash summary, key KPIs.
☐ Management / partner review and sign-off.
☐ Lock period and publish final reports.

Post-Close
☐ Create carry-forward or reversing entries if needed.
☐ Archive month-end workpapers and supporting documentation.
☐ Run a short retrospective: what took too long or blocked the close?

Typical timeline examples

• Standard close: 5–10 business days after month end (common for small/medium firms).
• Fast close: 1–3 business days (requires heavy automation, daily reconciliations, and strict discipline).
• Rolling close: do small chunks daily/weekly so month-end becomes light.

(Use these as planning guides — your target depends on team size, automation, and client complexity.)

Roles & responsibilities

• Bookkeeper / Staff Accountant: prepare reconciliations, post JEs, gather supporting docs.
• Senior Accountant: review reconciliations, approve JEs, prepare management pack.
• Controller / Partner: final review, sign-off on reports, commentary for management.
• Client / Department Lead: supply missing data, approve any client-facing figures.
• Clear ownership prevents duplication and missed steps.

KPIs to track for a healthy close

• Days to close (goal: shrink over time).
• % of reconciliations completed by day X.
• Number of unreconciled/suspense items.
• Count of manual journal entries per close (lower = cleaner systems).
• Time spent on month-end tasks (use to measure efficiency gains).

Common pitfalls & how to avoid them

• Late source documents — enforce cutoff dates and use upload links so clients/staff submit on time.
• Missing supporting documents — attach proof to every JE as you post it.
• Reconciliations left to the last minute — reconcile continuously (daily/weekly) instead of waiting.
• No single owner — assign a close owner and publish a timeline.
• Too many manual processes — automate feeds, recurring JEs, and approvals where possible.

Quick wins to shorten your close

• Keep bank feeds live and reconcile frequently.
• Automate recurring accruals and prepaid amortisation.
• Use standard JE templates and required-field checks.
• Maintain a month-end checklist with assigned owners and deadlines.
• Run a pre-close review 1–2 days after month end to catch obvious issues early.

Audit readiness & documentation

• Store all supporting files with the related reconciliations and JEs.
• Keep a lead schedule for material balances (cash, payables, receivables, fixed assets).
• Include reviewer comments and sign-offs in the workpapers.
• Retain versioned copies of the final management pack and trial balance.

This makes audits far less painful.

How Tidyflow helps you close faster (practical ways)

• Reusable month-end workflow templates — create a template for each close cycle with every task, owner, and due date. Start the workflow automatically at month end.
• Task assignments & reminders — assign reconciliations, JE posting, and reviews with deadlines and automatic nudges.
• Centralised document management — attach bank statements, payroll reports, and receipts to tasks and JEs so nothing lives in email.
• Client upload links — one-time or recurring upload links make it easy for clients or remote teams to submit docs before cutoffs.
• Approval & sign-off tracking — record who signed off on the pack and when.
• Audit trail & activity logs — full history of who did what, which supports audit requests.
• Dashboards & progress tracking — see % complete for reconciliations and JEs at a glance so you can spot bottlenecks early.
• Integrations — keep your accounting system (Xero/QBO) as the source of truth while Tidyflow manages the operational close process.

Put simply: Tidyflow keeps the work organised, visible, and accountable, so the numbers get finalised faster.

Governance & controls to build into the close

• Segregation of duties: separate posting, reconciliation and approval roles.
• Reconciliation sign-offs: required evidence before marking reconciled.
• Approval thresholds: define who can approve what size of adjustment.
• Period locks: prevent back-dated changes after sign-off.

Conclusion
The month-end close is more than just a checklist of accounting tasks—it’s the foundation for accurate financial reporting and sound decision-making. By consistently reviewing and reconciling accounts, identifying errors, and producing precise financial statements, businesses maintain trust in their financial data. A well-executed month-end close not only supports compliance but also gives business leaders the clarity they need to assess performance, control costs, and plan for the future.