What is a soft close?

A soft close is a preliminary month-end close producing estimated financial results before completing all reconciliations and final adjustments. It provides directional numbers faster than a full close, typically within two to three business days. Soft close serves decision-makers who need information before the formal close finishes.

What gets estimated

Revenue is usually accurate if invoicing stays current. Direct costs are mostly complete. Accrued expenses are estimated based on the prior month. Depreciation is calculated precisely. The biggest estimates involve unbilled revenue, accrued payroll, and late vendor invoices—flag which numbers are estimates.

When soft becomes permanent

Some firms settle for a soft close and never finalize. Books remain approximately right but never precisely right. Errors accumulate. Year-end becomes a scramble. Still perform a hard close afterward. Preliminary serves immediate needs. Final serves long-term accuracy.