My Month-End Close Checklist: Controls I Never Skip

The close is a process, not a sprint

I've learned that month-end close goes wrong for the same reasons: missing cutoffs, unclear ownership, and "we'll fix it later" journal entries. My rule is simple: if I can't explain a number with documents, I don't sign off. The close process requires discipline, organization, and a systematic approach to ensure accuracy and compliance.

The checklist I actually use

• Lock the calendar: I publish cutoff dates for AP, AR, payroll, and revenue. I stop accepting "just one more invoice" after cutoff unless it's material and approved. This means establishing clear deadlines for all departments and communicating them well in advance.
• Bank and cash reconciliations first: If cash doesn't tie, everything downstream is noise. I reconcile bank, payment processors, and petty cash (yes, it still exists). This involves comparing bank statements with internal records and investigating any discrepancies immediately.
• AP aging sanity pass: I scan for duplicate vendors, unusual round numbers, and invoices posted to the wrong cost center. I keep evidence of approvals. This includes reviewing vendor master files for duplicates and checking for potential fraud indicators.
• Revenue and accrual cutoffs: I verify shipments/services around month-end and accrue expenses when the benefit was received (not when the invoice shows up). This ensures revenue is recognized in the correct period according to accounting standards.
• Balance sheet reconciliation pack: Every key account gets a tie-out and a short narrative. If the support is missing, the account is not "reconciled." This includes accounts receivable, inventory, prepaid expenses, payables, and accruals.

Detailed account reconciliation procedures

For each balance sheet account, I follow specific procedures:

Accounts Receivable: Review the aging report, follow up on past due accounts, and analyze the allowance for doubtful accounts. Verify that all collections have been properly recorded and that any write-offs have proper authorization.

Inventory: Confirm that all inventory receipts and shipments are properly recorded in the correct period. Review slow-moving or obsolete inventory and adjust valuations accordingly.

Prepaid Expenses and Accrued Liabilities: Ensure that all prepayments are valid and properly amortized, and that all accrued expenses reflect services received as of month-end.

Fixed Assets: Verify that all asset additions and disposals are properly recorded, depreciation is calculated correctly, and any impairments are identified.

Documentation and evidence management

If auditors ask "why," I don't want to chase screenshots two months later. I keep a folder per close with bank statements, subledger reports, and reconciliations. It saves time and it protects the team. My documentation includes:

• Bank reconciliations with supporting documentation
• Account reconciliations with explanations for unusual variances
• Supporting documents for journal entries
• Evidence of proper authorization for all transactions
• Cut-off procedures documentation
• Management review signatures and approvals

Technology and automation in the close process

Modern ERP systems can significantly streamline the close process. I leverage:

• Automated journal entries for recurring transactions
• Integration between different modules to reduce manual data entry
• Dashboards and KPIs to monitor close progress
• Electronic approval workflows to speed up authorization processes
• Automated bank feeds to reconcile accounts more efficiently

Variance analysis and reporting

I perform monthly variance analysis to identify unusual fluctuations:

• Compare actual results to budget and prior year
• Analyze significant variances and investigate root causes
• Prepare variance analysis reports for management
• Identify trends and potential issues early
• Document explanations for all material variances

One last habit that changes everything

I always write a one-page close memo: major movements, one-offs, and risks. It helps leadership understand what changed and gives me a paper trail if questions come up later. This memo includes:

• Summary of key financial results
• Major variances and explanations
• Significant transactions during the period
• Upcoming items to watch
• Recommendations for management consideration

Common pitfalls to avoid

• Rushing through reconciliations to meet arbitrary deadlines
• Making adjustments without proper documentation
• Failing to follow up on reconciling items from prior periods
• Not properly segregating duties in the close process
• Overlooking cut-off procedures for revenue and expenses
• Neglecting to review journal entries for appropriateness

Team coordination and communication

A successful close requires coordination across multiple departments:

• Regular pre-close meetings to discuss potential issues
• Clear communication of deadlines and requirements
• Defined roles and responsibilities for each team member
• Escalation procedures for complex issues
• Post-close review meetings to identify improvement opportunities

Quality control measures

To ensure accuracy and compliance:

• Independent review of all key reconciliations
• Verification of cut-off procedures
• Confirmation of significant balances with third parties
• Review of subsequent events that might affect the financial statements
• Validation of all journal entries before posting