Monthly Close

What is a monthly close?

A monthly close is the process of finalizing your financial records at the end of each month. It includes reconciling accounts, recording adjusting entries, reviewing transactions, and producing financial statements. Closing monthly gives you timely financial information for decision-making. Many businesses cannot wait until year end to know how they are performing.

Monthly close checklist

Reconcile all bank and credit card accounts. Categorize all transactions. Record any accruals or deferrals. Review accounts receivable aging and follow up on past due invoices. Confirm accounts payable for completeness. Run the profit and loss statement and balance sheet. Review for unusual items or errors. The same steps each month build reliable processes.

Close timing and accuracy tradeoffs

Faster closes provide information sooner but may sacrifice accuracy. Some businesses close within five business days; others take two to three weeks. Find the balance that works for your needs. Preliminary close for quick review followed by final close after all information arrives works for many businesses. Document your close calendar and stick to it.