A consistent month-end close turns your accounting software into a management tool. This checklist gets most small businesses to reliable numbers within 10 business days.
Week 1: complete and reconcile
- Record all invoices, bills, expenses and payroll for the month.
- Reconcile every bank, credit card, PayPal, Stripe and other merchant account.
- Clear old uncleared items rather than carrying them forward.
- Reconcile payroll liabilities to the payroll provider's reports.
Week 2: adjust and review
- Book accruals for expenses incurred but not yet billed.
- Record prepaid expenses and amortize them.
- Book depreciation on fixed assets.
- Review accounts receivable over 60 days and decide on follow-up.
- Reconcile sales tax collected to your sales tax filings for each state where you file.
Report
Prepare a one-page summary:
- Revenue and gross margin against last month and budget.
- Operating expenses by category.
- Cash at month end and cash runway.
- Receivables and payables aging.
- Three actions for the coming month.
Year-end readiness
A clean monthly close means your year-end is just the twelfth close, plus a few adjustments for your CPA, such as fixed asset additions and 1099 vendor totals.
Ask us to run your monthly close.
Frequently asked questions
Around 5 to 10 business days is realistic for most small businesses.
Many small businesses file taxes on a cash basis, but monthly accrual reports give a truer picture of profit. Ask your CPA which suits you.
