Month-End Close Prep

Reconciliation confirmation (zero difference per account). Journal entries posted (accruals, amortization). P&L variance commentary (one bullet per flagged item). Close package: P&L, balance sheet, cash flow. Period locked in accounting system. Delivered to finance lead by close deadline. Open items list (if any) documented and assigned.

Before you start

Chart of accounts finalized and up to date
All bank and credit card feeds connected to accounting system
Prior month close completed and reconciled (clean starting point)
Accounting system access for the period being closed
Bank and credit card statements for the month
Any accruals, prepaid schedules, or deferred revenue schedules

The steps

Reconcile all bank and credit card accounts — Match every transaction against the statement, to the cent, on each bank and card account. Investigate anything over $1 — usually ACH timing, a duplicate, or an uncategorised bank charge. The reconciliation must show zero difference; do not close a month with an account open.
Review and categorize uncoded transactions — Pull everything uncoded and assign a GL code and cost centre from the vendor, amount and department. Anything ambiguous over $500 goes to the team lead rather than a guess. Target zero uncategorised before close.
Post accruals — Accrue what was incurred but not invoiced: payroll days falling in this month when the period spans month end, contractor services delivered without an invoice, and interest per the loan schedule. Debit the expense, credit accrued liabilities. They reverse at period start.
Amortize prepaid expenses and deferred revenue — Post this month's amortisation for each prepaid — insurance, annual software — debiting expense and crediting the prepaid asset. Recognise the earned portion of deferred revenue, debiting deferred and crediting revenue. Check both balance sheet accounts against their schedules.
Run variance analysis on P&L — Compare this month's P&L to last, line by line, in dollars and percent. Investigate anything over 15% — one-off items, timing, a new vendor, a headcount change. Two sentences per flagged line. That commentary is the CFO narrative.
Verify balance sheet accounts — Spot-check AR against the aged report, AP against its own, fixed assets against the depreciation schedule, and retained earnings against the prior period rollforward. If one is off, investigate before locking — not after.
Lock the period and deliver close package — Lock the period, then export P&L, balance sheet and cash flow — current month against prior, YTD and budget. Attach one bullet of commentary per flagged line. Deliver by the agreed deadline, usually day five, and list anything still open.

If it goes wrong

Large transaction categorized wrong — discovered after period lock

Open the period in accounting system (with CFO approval), post a correcting journal entry, re-lock. Document the correction in the audit trail note field. If the amount affects a report already shared externally, issue a corrected report with a version note.

Accrual reversal from prior month not posted — double-counting expense

Set up auto-reverse flag on all accrual journal entries in the accounting system. At period open, verify reversal entries posted automatically. If not, post manually immediately — do not wait until close.

Close package delivered late — CFO misses the reporting window

Work backward from the board reporting date. Close must be delivered 2 days before board report is drafted. Build a close calendar with daily milestones (Day 1: bank recs, Day 2: accruals, Day 3: variance, Day 4: package, Day 5: deliver).

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