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The month-end close process, step by step
Stuck on this in your own books?Bring it to a free 30-minute call with Narek. No pitch.
Book a callA month-end close is the routine that turns a month of transactions into numbers you can trust: record everything, reconcile every balance sheet account to outside evidence, post accruals and adjustments, review, then lock the period. We finish ours within 10 business days. Most slow closes are slow because of what happens during the month, not at the end of it.
- The close is finished when every balance sheet account ties to outside evidence.
- We finish within ten business days, a realistic target for most growing companies.
- A slow close is usually caused by what arrives late during the month.
What a month-end close is for
The close has one job. When it is done, every number on the balance sheet can be traced to something outside the accounting system: a bank statement, a loan schedule, a payroll report, a customer ledger. If a balance cannot be tied to evidence, the close is not finished, whatever the calendar says.
Reports come after that. A profit and loss statement built on unreconciled balances looks the same as a good one. That is what makes it dangerous.
The close in seven steps
- Cut off. Agree the last day for invoices, bills and expense claims. Chase what is missing before the month ends, not after.
- Record. Post all sales, bills, payroll and card spend. Match bank feeds.
- Reconcile. Bank, cards, payment processors, loans, payroll liabilities, sales tax, receivables and payables. Each one to a document from outside your system.
- Accrue and adjust. Expenses that belong to the month but have no bill yet, prepaid costs, depreciation, deferred revenue.
- Review. Compare the month to last month and to budget. Every large movement needs a reason a person can say out loud.
- Report. The management pack, with a short written explanation of what changed.
- Lock. Close the period in the system so nobody can post into it by accident.
A schedule that finishes by business day 10
This is the rhythm we run for clients. The exact days move with the size of the company, but the order does not.
| Business day | What happens | Who |
|---|---|---|
| Last week of the month | Chase missing bills and receipts. Confirm cut-off. | Accountant and your team |
| Days 1 to 3 | Post remaining transactions. Match bank and card feeds. | AI does the matching, an accountant checks the exceptions |
| Days 3 to 6 | Reconcile every balance sheet account. | Accountant |
| Days 6 to 8 | Accruals, prepaids, depreciation, revenue adjustments. | Accountant |
| Days 8 to 9 | Review against last month and budget. Questions answered. | Senior accountant |
| Day 10 | Reports sent with a written summary. Period locked. | Senior accountant signs |
The checks that catch errors
- Compare every import with its source. After an import, check the full date range against the source file, line by line. We made this a written rule after one of our own bank imports silently dropped seven rows.
- Reconcile to outside evidence. A balance that agrees only with your own subledger proves nothing.
- No unexplained suspense. Uncategorised and suspense accounts should be empty at lock.
- A second person signs. The one who prepared the numbers is not the one who approves them.
Where AI helps, and where it does not
AI is good at the repetitive part: matching bank lines to bills, spotting duplicates, drafting recurring journals, flagging a balance that moved more than usual. It does this in minutes and it does not get tired on day 7.
It is not good at deciding. Whether a cost is an asset or an expense, whether revenue is earned, whether an odd payment is fraud or a typo: those are judgments, and a named accountant should make them and sign for them.
Where this goes wrong
| The problem | What it costs you | The fix |
|---|---|---|
| Reports go out before reconciliations are done | Decisions are made on numbers that later change | Reconcile first, report second, every month |
| The same items arrive late every month | The close drags and the team works evenings | List the late items and fix each one at its source |
| The person who prepares also approves | Errors pass, because nobody else looks | A second person reviews and signs |
First published 2024. Rewritten and checked in September 2026. If something here is out of date, tell us and we will fix it.
