Best Practices for Your Financial Close Checklist

Recommended Month-End Close Process

It is hard to overstate the importance of developing a financial close timeline. It is the critical process that ensures the Accounting & Finance Department can generate timely, accurate, and actionable financial statements and reporting to effectively manage a company. Yet many companies struggle to create and consistently adhere to it. While circumstances can dictate adjustments, the following approach can be utilized to achieve an appropriate result:

Typical monthly timeline:

• Workdays 1-5: Closing monthly results
• Workdays 6-10: Lessons learned discussion, balance sheet review, reconciliations, and any post-closing adjustments
• Workdays 11-15: Make progress on long-term projects
• Workdays 16-20: Engage with staff and prepare for following month end closing

Typical monthly closing steps (can be used to develop calendar template):

Pre-Close Preparation (Prior to WD0)

These activities are critical and should occur 3–5 days before month-end:

• Review Unposted Transactions (AP, AR, Payroll, Journal Entries)
• Communicate Close Schedule & Deadlines to all departments
• Run Pre-Close Trial Balance to catch major anomalies
• Ensure Subledgers are Up-to-Date (Fixed Assets, Inventory, Projects)
• Lock Forecast to compare against actuals post-close
• Schedule Key Meetings (Close Review, FP&A review, CFO pack sign-off).

Workday 0 (Month-End):

Goal: Ensure all transactions for the month are recorded.

• Post last day transactions: sales, inventory, bank, payroll, and AP.
• Cut-off procedures for revenue recognition and accruals.
• Communicate hard deadline for all invoice entry and PO receipts.
• Preliminary review of revenue and expense cutoff.
• Start recording known standard accruals (payroll, bonuses, utilities).
• Freeze subledger posting after close (unless exception granted).

Workday 1

Goal: Ensure subledgers are closed and reconciled.

• Close AP, AR, Inventory, and Fixed Assets subledgers.
• Load all journal entries from subledgers to GL.
• Post standard recurring entries (depreciation, amortization, prepaids).
• Review and adjust key accruals.
• Begin balance sheet reconciliations for key accounts.
• Review revenue and COGS trends for anomalies.
• Notify FP&A of early issues or material swings.

Workday 2

Goal: Complete remaining journal entries and validate balances.

• Finalize manual accruals and corrections.
• Complete all intercompany eliminations and reclasses.
• Run first full Trial Balance and preliminary P&L and BS.
• Continue balance sheet reconciliations (cash, AR, AP, inventory, etc.).
• Ensure compliance with revenue recognition and cost matching.
• Review margin and expense variance to forecast or prior month.
• Controller starts reviewing unusual items and confirms explanations.

Workday 3

Goal: Complete reconciliation and lock trial balance.

• Lock trial balance for reporting (except CFO-approved changes).
• Finish all balance sheet reconciliations.
• Provide variance analysis (vs budget, forecast, and prior period).
• Submit P&L and key metrics to FP&A and senior finance.
• Start populating monthly reporting package.
• Run preliminary cash flow analysis.

Workday 4

Goal: Final review and package preparation.

• Controller reviews entire financials with accounting team.
• Adjustments only for material misstatements.
• Finalize management commentary and variance explanations.
• Ensure all supporting schedules (BS recs, accruals, journals) are filed.
• Meet with FP&A for alignment on messaging and reporting pack.
• Run final reports from ERP (GL Detail, Trial Balance, Consolidation).
• Controller signs off internally on numbers.

Workday 5

Goal: Deliver results to CFO and executive team.

• Publish final monthly financial reporting pack:
  • Income Statement (P&L)
  • Balance Sheet
  • Cash Flow
  • Key Ratios & KPIs
  • Variance Analysis and Commentary
• Upload data to any corporate consolidation/reporting tools.
• Submit group reporting (if part of larger company).
• Conduct Close Review Meeting with CFO or Head of Finance.
• Document improvement points for next month’s close.

 Post-Close (WD6-10)

• Lessons learned review with team.
• Continuous improvement meeting (what slowed close?).
• Review aging schedules, DSO, inventory turn trends, etc.
• Back up close documentation for audit trail.

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