Month-End Close Checklist: Complete Guide for Finance Teams

Introduction: Why You Need a Month-End Close Checklist

The month-end close is one of the most critical recurring processes in finance. Every month, teams must finalize transactions, reconcile accounts, make adjustments, and produce accurate financial statements, often under tight deadlines.

A comprehensive checklist ensures nothing is missed, provides accountability, and creates a repeatable process. Whether you're establishing a close process for the first time or improving an existing one, this checklist covers the essential tasks.

Pre-Close Preparation (Days -5 to -1)

Preparation before month-end reduces crunch time and catches issues early.

Transaction Cutoff

• Communicate cutoff deadlines to all departments
• Process pending invoices and expense reports
• Complete all intercompany transactions
• Finalize revenue recognition for in-progress projects
• Process payroll and related accruals

Data Collection

• Request bank statements and confirmations
• Obtain credit card statements
• Collect outstanding vendor invoices
• Gather inventory counts if applicable
• Request customer payment confirmations for large balances

System Preparation

• Verify all sub-ledgers have posted to GL
• Confirm integrations are functioning
• Run preliminary trial balance to identify anomalies
• Check for stuck or pending transactions
• Verify prior period adjustments have cleared

Close Day 1: Data Finalization

Cut Off Transactions

• Lock prior month periods
• Post final transactions for the period
• Process final bank feeds and imports
• Record cut-off entries for timing differences

Initial Reconciliations

Begin reconciliation for accounts with external data:

• Bank reconciliation for all cash accounts
• Credit card reconciliation
• Payment processor reconciliation (Stripe, Adyen, PayPal)
• Merchant account reconciliation

Close Days 2-3: Account Reconciliation

Balance Sheet Reconciliation

Complete balance sheet reconciliation for all significant accounts:

• Accounts receivable aging and subledger reconciliation
• Accounts payable aging and subledger reconciliation
• Inventory valuation and count reconciliation
• Fixed assets and accumulated depreciation
• Prepaid expenses and amortization schedules
• Accrued liabilities and supporting detail
• Deferred revenue schedules
• Debt and interest reconciliation
• Intercompany balances

Income Statement Review

• Revenue by category and trend analysis
• Cost of goods sold and gross margin review
• Operating expense variance analysis
• Unusual transactions or one-time items

Close Days 3-4: Adjusting Entries

Standard Adjustments

Record journal entries for standard month-end adjustments:

• Depreciation and amortization
• Prepaid expense amortization
• Accrued expenses (wages, benefits, utilities)
• Revenue recognition entries
• Deferred revenue releases
• Bad debt expense and allowance adjustments
• Inventory adjustments if applicable

Non-Standard Adjustments

• Error corrections identified during reconciliation
• Reclassification entries
• Estimates and reserves adjustments
• FX revaluation entries
• Intercompany eliminations

Close Days 4-5: Review and Finalization

Analytical Review

• Compare actuals to budget and forecast
• Analyze month-over-month variances
• Review year-over-year trends
• Investigate unusual fluctuations
• Document explanations for significant variances

Quality Checks

• Trial balance in balance
• Bank reconciliations tie to GL
• Subledgers tie to control accounts
• Intercompany balances net to zero
• Revenue and expense accounts cleared properly

Management Review

• Controller review of reconciliations
• CFO review of financial statements
• Sign-off on material adjustments
• Approval of final close entries

Post-Close Activities (Day 5+)

Period Lock and Documentation

• Lock the accounting period
• Archive supporting documentation
• File reconciliation workpapers
• Update close calendar for next month

Reporting

• Finalize financial statements
• Generate management reports
• Prepare board reporting package
• Distribute reports to stakeholders

Process Improvement

• Document issues and delays encountered
• Identify automation opportunities
• Update procedures as needed
• Schedule process improvement reviews

Month-End Close Checklist by Account Type

Cash and Bank Accounts

1. Import final bank transactions
2. Complete bank reconciliation for each account
3. Investigate and clear outstanding items
4. Record bank fees and interest
5. Verify cash position accuracy

Accounts Receivable

1. Reconcile AR subledger to GL
2. Review AR aging report
3. Assess collectibility and adjust allowance
4. Record bad debt expense if needed
5. Review credit memo and deduction activity

Accounts Payable

1. Process all invoices received
2. Reconcile AP subledger to GL
3. Review AP aging for unusual items
4. Accrue for goods/services received not invoiced
5. Verify vendor statement reconciliations

Revenue

1. Review revenue recognition by contract/project
2. Record deferred revenue adjustments
3. Verify revenue cutoff
4. Reconcile billing system to GL
5. Document revenue recognition judgments

Accelerating Your Month-End Close

Organizations looking to reduce close time should focus on automation. NAYA's reconciliation platform automates bank reconciliation, payment processor reconciliation, and balance sheet account reconciliation, eliminating days of manual work.

Key strategies for faster close:

• Automate data gathering and reconciliation
• Implement continuous accounting throughout the month
• Standardize processes across entities
• Eliminate unnecessary review steps
• Use close management software to track progress

Ready to reduce your close time? Explore our month-end close automation guide to learn how NAYA helps finance teams close faster.