A month-end close checklist that actually gets used

Most small businesses do not have a closing process — they have a habit. Here is the checklist we run for every client, in order, and why each step is on it.

A close is not about making the software look tidy. It is about being able to say, with a straight face, that the numbers on the profit and loss are the numbers that happened. When we take on a new client the first thing we install is this sequence. It takes a trained bookkeeper between two and five hours a month for a typical Indiana small business.

The eleven steps

1. Import and match every feed. Bank, credit card and merchant accounts. Nothing else can be trusted until the feeds are complete through the last calendar day.
2. Reconcile to the statement, not to the feed. Feeds silently drop transactions. The paper (or PDF) statement is the authority.
3. Clear undeposited funds. This account is where most small-business files go wrong. It should be near zero at month end, and every stranded item explained.
4. Review the uncategorised account. Anything sitting in "Ask my accountant" gets resolved or listed in the query log — never carried forward twice.
5. Check accounts receivable ageing. Anything over 60 days gets flagged to the owner with a suggested action, not just reported.
6. Check accounts payable and accruals. Bills received after month end that relate to the month just closed are accrued, otherwise margin looks better than it was.
7. Post payroll journals. Gross wages, employer taxes and any accrued PTO, split by department where the client tracks it.
8. Run depreciation and loan amortisation. Small monthly entries, but they are what keeps the balance sheet honest for lenders.
9. Reconcile sales tax liability. What the return said versus what the ledger holds. A gap here is nearly always a mapping error in the POS.
10. Compare to prior month and prior year. Anything moving more than 15% gets an explanation written down before the pack goes out.
11. Write the summary. One page, plain English: what happened, what changed, what to watch next month.

Why the tenth business day

Information loses value quickly. A profit and loss delivered on the twenty-fifth describes a month you have already half-forgotten and cannot influence. We commit to the tenth business day because it is early enough to act on and late enough to be accurate once bank statements and supplier bills have landed.

The three mistakes we correct most often

Reconciling only the checking account. Credit cards and loans need the same discipline; skipping them is how businesses end up with tens of thousands of dollars of misstated liabilities.

Categorising by vendor name. The same hardware store can supply job materials, office supplies and an owner's personal purchase in the same week. Rules save time; they do not replace judgement.

Treating owner draws as expenses. Very common in single-member LLCs, and it quietly makes the business look unprofitable to anyone reading the statements.

Want the checklist applied to your file?

If your close is drifting past the twentieth, or nobody is quite sure when the last reconciliation was completed, our free review will tell you where the file stands. Call +1 (615) 727-3650 or use the contact form.