Free template
A free month end close checklist in Word, organised by working day, with owners, reviewers and the reconciliations that matter most.
By Christopher Fagan, Managing Partner, PEF Consulting Partners
A note before you start
A slow close is usually a symptom of work that should have happened during the month: unreconciled accounts, late accruals and manual journals. The checklist helps, but the real gains come from moving tasks before day one and agreeing cut off dates with the rest of the business. Measure the close in working days and track the number of adjustments made after it.
Christopher Fagan, Managing Partner, PEF Consulting Partners
Give every task an owner, a reviewer and a working day. Move as much as possible into the days before month end, such as accrual estimates and agreeing intercompany balances. Reconcile balance sheet accounts monthly on a risk basis and evidence the review. Track the close in working days and the number of late adjustments, and review the checklist each quarter to remove steps that add nothing.
[Organisation name] | Version 0.1 | [Date] | Owner: [Name, role]
Three working days before to the last day of the month.
| Task | Owner | Reviewer | Done |
|---|---|---|---|
| Send cut off reminders to purchasing, sales and payroll | |||
| Agree intercompany balances with counterparties | |||
| Prepare estimates for accruals and prepayments | |||
| Review open purchase orders and goods received not invoiced |
| Task | Owner | Reviewer | Done |
|---|---|---|---|
| Close the sales and purchase ledgers | |||
| Post payroll journals | |||
| Post accruals, prepayments and deferred income | |||
| Run depreciation and post fixed asset additions and disposals | |||
| Reconcile bank accounts |
| Task | Owner | Reviewer | Done |
|---|---|---|---|
| Reconcile debtors, creditors and control accounts | |||
| Reconcile VAT and payroll liabilities | |||
| Value stock and post adjustments | |||
| Eliminate intercompany balances | |||
| Clear suspense and clearing accounts to nil |
| Task | Owner | Reviewer | Done |
|---|---|---|---|
| Review the trial balance and investigate variances | |||
| Prepare management accounts and commentary | |||
| Review cash flow and the forecast | |||
| Senior review and sign off | |||
| Lock the period |
| Measure | Target | This month |
|---|---|---|
| Working days to close | ||
| Adjustments after close | ||
| Balance sheet accounts reconciled and reviewed | ||
| Manual journals |
Template by PEF Consulting Partners, pefconsultingpartners.co.uk. Free to use and adapt.
Related reading: finance transformation, a practical guide to finance transformation, what an ERP system is.
The set of tasks a finance team completes after each month to close the books: posting accruals and journals, reconciling accounts, reviewing the results and producing management accounts.
Many mid sized finance teams aim for five working days or fewer, and the strongest manage three. The number matters less than the trend and the count of adjustments made afterwards.
Record to report is the wider process from recording transactions through to financial reporting. The month end close is the part of it that happens after each period ends.
Move work before day one, reconcile continuously rather than at month end, reduce manual journals, automate bank and intercompany matching, and agree firm cut off dates with the rest of the business.
If the close keeps stretching past a week, the cause is usually in the processes and systems upstream, and that is where finance transformation pays for itself.