Month End Close Checklist

Count working days from month-end, so WD1 is the first business day of the new month. Order tasks by what each one waits for, not by account number. Give every row an owner, a due day and the evidence it leaves, such as a statement, a report or an entry number.

A few tasks must happen on the last working day of the month (WD0). Cut off supplier invoices and customer billing, so each lands in the right month. Count inventory if you hold it, and save the exchange rates you will use, with their source. None of them can be redone a week later.

Put inputs from outside accounting on the calendar too, each with the person who produces it: the payroll register, the warehouse count, signed contracts from sales. Then set your target by working back from the first deadline your numbers must meet, such as a board pack or a lender report.

Start with cash. Reconcile each bank account to the ledger, then tie every other balance to its support: the aging reports, the payroll register, the inventory count. A bank reconciliation template covers the bank side line by line, and a balance sheet reconciliation template ties the other accounts to outside evidence.

For every account, record the same five things: the ledger balance, the support balance, the difference, what explains it, and what is still unexplained, with its age in days. Explain with facts, not a bare label like "timing difference." If you don't know yet, leave it blank rather than guess.

Never force a difference to zero, and have someone other than the preparer review each reconciliation. Small teams can't always separate the two jobs, and the US Government Accountability Office's internal control standards for federal agencies acknowledge that. For a smaller organization, they suggest adding levels of review for key processes¹ and checking a random sample of transactions against their documents. The owner or an outside accountant can do that review.

Adjusting entries put revenue and expenses in the month they belong to. Rice University's free OpenStax accounting textbook defines accrued expenses as those incurred in a period but not yet recorded, with no money paid², such as interest and salaries. Prepaids run the other way: you paid in advance, so you expense a slice each month.

1. 1

   Reverse last month's accruals

   Then confirm each one reversed. A missed reversal counts the expense twice, and the trial balance still balances, so it won't flag the error.

2. 2

   Accrue costs you haven't been billed for

   Base each estimate on the method you wrote down, such as hours worked or a contract rate, not on last month's figure.

3. 3

   Amortize prepaids and post depreciation

   Work from the prepaid schedule and the fixed asset register, then check each against its ledger balance.

4. 4

   Revalue foreign currency balances

   Use the rates you saved on the last day of the month, so anyone can reproduce the entry later.

Write each recurring judgment down once: the treatment, who decided it and when, and what would change it. The PCAOB, which sets the standards for audits of US public companies, lists choosing and applying accounting policies³ as part of the period-end financial reporting process. A written basis stops an estimate drifting each time someone new covers the close.

Next, run the trial balance and compare each line with last month and with budget. Keep the two comparisons separate, because they give different answers. Write down the threshold above which a variance needs an explanation, in dollars and as a percentage, and who set it and when.

An explanation names a cause, not a direction. "Services revenue is 11% ahead of budget" only repeats what the reader can see. "Two annual renewals forecast for March signed on February 26" explains it. Mark each variance as timing, saying when it reverses, or permanent, saying whether the forecast now includes it.

Before sign-off, scan the month's manual journal entries. The PCAOB's fraud standard lists warning signs auditors look for. They include period-end or post-closing entries with little or no explanation⁴, entries to seldom-used accounts, entries by people who rarely post, and round numbers. The same scan catches honest mistakes.

Closed and locked are different facts, so give each its own date. Closed means your team has finished, the reviewer has signed off and nobody plans another entry. Locked means your accounting software refuses entries dated in that month.

Locks are often softer than they sound. In QuickBooks Online, the lock is a setting called "Close the books." Intuit offers it in two strengths: one that warns users but still lets them make changes⁵, and one that requires a password. Xero lets you lock all user roles or all except administrators⁶, and administrators can remove a lock temporarily.

So write down who can still post behind the lock, by name. Then list every entry dated in the month but posted after you closed it. If one changed a figure already sent to a board or a lender, say so in the next report instead of letting the number quietly change.

The day after the numbers go out, spend 15 minutes on one question: which task finished latest, and what was it waiting for? Change one thing for next month and give it an owner.

If your bank only sends PDF statements, River's bank statement converter turns them into rows you can match against the ledger.