What is the month-end close?
Also called: monthly close, financial close
Last updated
The month-end close is the set of accounting tasks a finance team completes after each month ends to finalise its books: recording outstanding transactions, posting accruals and adjustments, reconciling accounts, reviewing the results and producing the management accounts. It is usually measured in working days, and a faster, accurate close is a common finance goal.
In more detail
Most closes follow the same order: cut-off of sales and purchases, payroll and expense posting, accruals and prepayments, depreciation, reconciliations of bank and balance sheet accounts, intercompany balances, review of the results against budget, and the final reports. Many tasks depend on others finishing first.
Teams that shorten their close usually do it by moving work earlier in the month, standardising the task list with an owner and a day for each, and reviewing the close afterwards to find the bottlenecks.
Example
A finance team closes in five working days. On day 1 they post payroll and accruals, on day 2 they finish the bank and balance sheet reconciliations, on day 3 the financial controller reviews the results, on day 4 they agree variances with budget holders, and on day 5 the reports go to the board.
The close in CheckFlow
In CheckFlow a schedule starts the close checklist each month, with every task assigned and due on a business day counted from the start. Halts stop the review starting before the reconciliations are done, and Analytics shows which steps tend to run late.
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