Ask ten business owners what their bookkeeper does each month and you’ll get ten vague answers. That vagueness is a problem: if you don’t know what “done” looks like, you can’t tell whether your books are actually in good shape. Here is a practical month-end close checklist, the same one we work from, and what you should have in hand by the 15th.
The ten steps of a proper monthly close
1. Categorize every transaction
Every deposit, payment and card charge is assigned to the right account: revenue, cost of goods, payroll, rent, software and so on. Miscategorized transactions are the most common reason financial statements can’t be trusted.
2. Reconcile the bank accounts
Your books’ balance must match the bank’s statement balance, line by line. Reconciliation is where duplicates, missed deposits, bank errors and fraud get caught.
3. Reconcile credit cards
Same process for every business credit card. Unreconciled cards are where personal charges, forgotten subscriptions and double payments hide.
4. Review accounts receivable
Who owes you money, how much and for how long? An aging report shows which customers are slipping past 30, 60 or 90 days, before it becomes a cash-flow problem.
5. Review accounts payable
What do you owe vendors, and when is it due? Tracking payables prevents late fees, missed early-payment discounts and paying the same bill twice.
6. Enter checks and deposits correctly
Checks written and deposits made are matched to the invoices and bills they settle, so customer and vendor balances stay accurate.
7. Record and match payroll
Payroll runs, employer taxes and deposits should post to the right accounts and tie to your payroll reports. Where payroll and bookkeeping are separate, this step is a frequent source of errors. (This is one reason we offer both together: see our payroll services.)
8. Update the fixed-asset list
New equipment, vehicles or improvements are recorded so your CPA can handle depreciation and you know what the business owns.
9. Review for unusual items
A good bookkeeper looks for the odd: a vendor charge that tripled, a large uncategorized deposit, an expense that doesn’t fit. Anything unclear becomes a short question to you.
10. Deliver financial statements with comparisons
You receive a profit and loss statement and balance sheet, compared to prior periods, by the 15th of the following month.
What you should receive each month
- Profit and loss statement (income statement)
- Balance sheet
- Comparisons to prior months, and ideally to the same month last year
- A short list of open items or questions
- Access to your books in your accounting software (QuickBooks Online, Xero or Wave), so you can look any time
Warning signs your books aren’t really being closed
- Statements arrive irregularly, or not until quarter-end or tax time
- You’re never asked a question, which usually means nobody is looking closely
- Bank accounts aren’t reconciled, or you can’t say when they last were
- Large “uncategorized” or “ask my accountant” balances sit unresolved
- Your payroll numbers don’t match your books
The 15th matters. A predictable deadline turns bookkeeping from an occasional cleanup into a rhythm. You always know the state of the business within two weeks of month-end, which is early enough to act on it.
What if I’m behind?
Many owners come to us with several months, or years, of unreconciled transactions. That’s fixable. We review what exists, give you a realistic timeline and written estimate, then catch you up so the checklist above becomes routine. See our bookkeeping services for what’s included.
Want a bookkeeper who works from a checklist like this every month? Book a free consultation and we’ll look at where your books stand today.
General information only. Confirm accounting and tax specifics with a qualified professional.