The month-end close checklist that gets you to day seven

Why close speed matters

A month-end close that finishes on the 22nd produces numbers describing a month everybody has stopped thinking about. Whatever the report says, the decision window has closed. Nobody is going to change staffing, pricing or purchasing in response to information about a period that ended three weeks ago.

Closing by day seven changes what the numbers are for. It makes them an operating input rather than a historical record. Every other benefit — faster audits, cleaner tax computations, better forecasting — follows from that.

The speed also correlates strongly with quality. Teams that close fast do so because the process is defined and the reconciliations are current, not because they cut corners. Slow closes are usually slow because problems accumulate and get resolved at month end instead of when they occur.

The pre-close discipline

Most of what determines close speed happens before the month ends. Three things done during the month:

• Bank reconciled weekly, not monthly. Four small reconciliations are faster and more accurate than one large one, and errors surface while people still remember the transaction.
• Supplier invoices chased before cut-off. Waiting for invoices is the single largest cause of slow closes. Set a cut-off date, communicate it to suppliers and to your own team, and accrue anything that misses it rather than holding the close open.
• A standing accrual and prepayment schedule. Maintained continuously so month end is a review rather than a reconstruction.

Days 1–3: capture

1. Close the sub-ledgers to new postings for the period.
2. Ensure all sales are recorded — POS data, invoices raised, e-commerce and marketplace settlements, aggregator reports.
3. Process all supplier invoices received before cut-off.
4. Post payroll from the approved payroll run, including gratuity and leave accrual.
5. Record all bank transactions, card transactions and payment gateway settlements.
6. Process expense claims and petty cash.
7. Post inventory movements and, where applicable, the physical count.

Days 4–5: reconcile

This is the stage that determines whether the numbers can be trusted.

1. Every bank account reconciled to the statement, with reconciling items aged and explained. Anything older than 30 days needs a resolution, not a carry-forward.
2. Credit cards, gateways and aggregator settlements reconciled to their statements.
3. Accounts receivable sub-ledger agreed to the control account, with ageing reviewed.
4. Accounts payable sub-ledger agreed to the control account, with supplier statement reconciliations for significant suppliers.
5. Inventory reconciled between system and count, with variance investigated rather than adjusted silently.
6. VAT control accounts reconciled, with output tax agreeing to revenue and input tax to purchases.
7. Intercompany balances agreed between entities. Unagreed intercompany is a standard audit finding and a Corporate Tax related-party exposure.

Days 6–7: adjust and review

1. Post accruals for goods and services received but not invoiced.
2. Release and post prepayments.
3. Post depreciation from the fixed asset register.
4. Review and adjust provisions — bad debt, inventory obsolescence, end-of-service.
5. Post any foreign currency retranslation.
6. Review the P&L against budget and prior month, and investigate anything that moves materially without explanation.
7. Independent review. Someone other than the preparer reviews the close before anything is issued. This is a control, not a formality.

Day 8: report

Issue the management pack: P&L, balance sheet, cash flow, variance analysis, KPIs and written commentary. The commentary is what makes it useful — what moved, why, what it means, and what needs a decision.

The balance sheet rule

The single discipline that separates reliable accounts from unreliable ones: every balance sheet account must be supported by a schedule that agrees to the ledger.

Every one. Cash to the bank statement. Receivables to the aged listing. Inventory to the count. Prepayments to the schedule. Fixed assets to the register. Accruals to the calculation. Payables to the aged listing. VAT to the return. Loans to the amortisation schedule. Equity to the corporate records.

If an account cannot be explained line by line, the number is a guess — and the P&L is wrong by the same amount, because every unsupported balance sheet item has a corresponding error in profit. This is also precisely what an auditor tests and what a Corporate Tax computation depends on.