The Small Business Month-End Close Checklist

If you’re struggling to keep up with your books and the month-end close process, you can outsource your bookkeeping to Bench. Routinely monitoring inventory levels will help you manage your working capital efficiently. If you overstock, you’ll trap money sap business one gold partner unnecessarily in inventory and risk wastage. Likewise, if you understock, you’ll risk production losses, missed revenue, and reputational damage. Review your accounts receivable to see if your customers are paying within the agreed credit term.

In most companies, there’s a good deal of pressure to produce accurate financial statements as quickly as humanly possible. Increase accuracy and efficiency across your account reconciliation process and produce timely and accurate financial statements. Drive accuracy in the financial close by providing a streamlined method to substantiate your balance sheet.

How to use the Checklist:

But not analyzing your financials and taking corrective action can be catastrophic for a small business. Next, review if you’ve invoiced all your customers accurately and send any missing invoices. Check if you’ve recorded all your incoming cash during the month and capture any missing items. In addition, doing inventory monthly allows you to see what is selling and what needs to be re-ordered. This step will let you see 1.) if any invoices are outstanding, and 2.) where your sales for the month, and the year, stand. That’s why checklists are popular amongst people who are productivity driven and found it so beneficial for getting things done.

• You should also review the market value of assets and make the necessary entries to record unrealized losses to reflect any decline in value.
• The due diligence of all stakeholders plays a pivotal role in ensuring that the month-end closing is accurate and properly recorded.
• When it comes to month-end closing checklists, there are certain roles and responsibilities that must be taken for them to be successful.
• These communications should include brief reminders as to exactly what needs to be done and a due date for completion.
• These financial reports help company leadership understand and stay on top of their finances and investments, to manage cash flow positively and grow the company with informed business decisions.

We are here for you with industry-leading support whenever and wherever you need it. Finance and IT leaders share a common goal of equipping their organizations with ways to work smarter to enable competitive advantage. This intersection between CFO and CIO priorities is driving more unity in terms of strategy and execution.

Review Accounts Payable

You’ll need to calculate the portion of payroll expense you incurred in the month that just ended and make a reversing entry to payroll expense vs. accrued expenses. Your inventory module should provide a detailed listing of your stock, along with a total that reflects your preferred inventory valuation method. If you have performed a physical inventory count, this is a good time to make the appropriate adjustments within the inventory module. Again, you should avoid making any direct entries in the general ledger unless you need to make an extraordinary adjustment. In other words, if someone not currently responsible for a task can’t come in and gain a high-level understanding from the checklist description, then it needs additional clarity or detail.

Ask someone who didn’t prepare the accounts to review them so they’ll find errors or problems you didn’t notice. They are an asset you’ll recognize as expenses in different accounting periods. Small businesses often struggle to collect money on time, resulting in poor cash flow management and bad debt. Check if you’ve posted debit and credit entries accurately for all the transactions. Next, review if you’ve posted your journal entries correctly into your general ledger. Goodwill represents the excess of the purchase price of an acquisition over the fair value of the underlying net tangible and intangible assets.

Have a closing date

Centralize, streamline, and automate end-to-end intercompany operations with global billing, payment, and automated reconciliation capabilities that provide speed and accuracy. Ignite staff efficiency and advance your business to more profitable growth. Automatically process and analyze critical information such as sales and payment performance data, customer payment trends, and DSO to better manage risk and develop strategies to improve operational performance. Understand customer data and performance behaviors to minimize the risk of bad debt and the impact of late payments.

Executives need these reports to stay informed on business performance and use them as the basis to make major decisions for the next fiscal period. Make sure they’re accurate, so your company’s strategic financial planning is built on healthy foundations. Month-end close can often be a stressful time for people on the finance and accounting team.

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A few simple steps can have a profound and positive impact on your business. Doing so reduces your reliance on last-minute records from external accounting. Along with that, you can make more informed decisions based on your company’s financial activities. It positions your executive team to make cash allocations that benefit each department of the company. Double-check your reports once more and then deliver them to the executive teams for reviewing and analysis.