Month End Close Checklist: Streamline Your Business Operations

Creating an organized month end close checklist process isn’t just about keeping your books in order, it’s about building a foundation for smart business decisions. As you close out the month, your month end close process will help you keep track of important tasks and see what chances and challenges lie ahead.

Why Your Business Needs A Strong Month End Close Process

A structured month end close checklist gives you clear visibility into your company’s performance and helps you make informed decisions. Recent studies show that businesses with organized financial processes are 68% more likely to secure funding and grow sustainably. This isn’t surprising, accurate financial data helps you spot trends, manage cash flow, and identify areas for improvement.

The Challenges Of Month End Close For Startups

Early-stage businesses often face unique challenges when it comes to the month-end close. These challenges can include:

• Lack of Dedicated Resources: Startups may not have the dedicated accounting staff necessary for a smooth close.
• Manual Processes: Reliance on manual data entry and spreadsheets can lead to errors and inefficiencies.
• Unfamiliarity with Accounting Standards: Understanding and applying accounting principles can be complex for those new to business ownership.
• Reconciliation Issues: Reconciling bank statements, accounts payable, and accounts receivable can be a time-consuming hassle.
• Meeting Tax Deadlines: Failure to stay on top of deadlines can lead to penalties and delays.

Optimize your business with our free financial modeling template to help address these challenges.

The Benefits Of A Month End Close Checklist

A well-defined month end close checklist can help you overcome these challenges and streamline your business operations. By following a checklist, you can:

• Increase Efficiency: Streamline workflows and save time by having a clear roadmap for each step of the close process.
• Improve Accuracy: Minimize errors by making sure all essential tasks are completed systematically.
• Enhanced Visibility: Gain a real-time view of your company’s financial performance through timely and accurate reporting.
• Peace of Mind: Reduce stress and maintain compliance with tax regulations by having a structured close process in place.

Essential Components Of Your Month End Close Checklist

Let’s walk through each component and why it matters for your business. Whether you’re a startup finding your financial footing or an established company refining your processes, these steps will help you close your books with confidence.

1. Revenue Review and Reconciliation

• Match all revenue transactions with bank deposits
• Review outstanding invoices and follow up on collections
• Check subscription revenue recognition
• Verify payment processor settlements
• Document any revenue adjustments

2. Expense Management and Documentation

Before making any closing entries, you need to account for all expenses. This includes:

• Reviewing and coding all expenses
• Matching purchase orders with invoices
• Recording accruals for unpaid expenses
• Reconciling employee expense reports
• Checking recurring subscription charges

Learn more about how to select the right outsourced CFO services for your industry to help manage these processes effectively.

3. Inventory Management

For product-based businesses, inventory reconciliation is crucial:

• Complete physical inventory counts
• Update inventory values
• Calculate cost of goods sold
• Document any write-offs or adjustments
• Review purchase commitments

4. Account Reconciliations

This step serves as your financial quality control:

• Reconcile all bank accounts
• Review credit card statements
• Check merchant account settlements
• Verify intercompany transactions
• Review balance sheet accounts

Consider when to hire a part time CFO to help establish these processes.

Building Your Month End Close Timeline

This practical timeline spreads the workload across the month, reducing end-of-month pressure and giving you time for thorough reviews. By starting certain tasks early and running others in parallel, you can close your books faster and with fewer errors.

Week 1-2:

• Daily sales and payment reconciliation
• Expense coding and documentation
• Inventory updates
• Initial account reconciliations

Week 3:

• Complete all reconciliations
• Review financial statements
• Prepare management reports
• Document variances

Week 4:

• Final reviews and approvals
• Close the books
• Generate reports
• Start planning for next month

Learn about the top benefits of interim CFO services for implementing these timelines.

Building A Sustainable Process

Success in month end close isn’t just about completing tasks, it’s about creating sustainable processes that grow with your business. Consider these key elements:

1. Documentation

• Create detailed procedure manuals
• Update processes regularly
• Document system access and controls
• Keep audit trails

2. Team Training

• Regular training sessions
• Cross-training for key tasks
• Clear role assignments
• Performance monitoring

3. Quality Control

• Multiple review levels
• Variance analysis
• Exception reporting
• Regular process audits

Learn more about CFO services consulting to help establish these processes.

Tools To Simplify The Month End Close Process

Modern businesses, especially those in retail, e-commerce, and CPG, can benefit from using technology to simplify the month end close checklist process. Consider integrating accounting software and tools like:

• QuickBooks: A widely-used, user-friendly accounting software ideal for tracking expenses, invoices, and bank transactions with ease.
• Deel: Streamlines payroll and compliance for remote teams, making global payroll and contractor management seamless.
• Bill.com: Automates accounts payable and receivable processes, allowing for faster, more accurate payments.
• Stripe: Simplifies payment processing for online transactions, with easy integration and secure, real-time data tracking.
• Square: Excellent for point-of-sale operations, Square supports in-store and online sales and integrates smoothly with QuickBooks.
• Gusto: A robust payroll and HR platform that manages payroll taxes, benefits, and onboarding, helping keep your team and records organized.

These tools can reduce manual work, improve accuracy, and provide real-time insights into your financial health. For more advanced support, CFO services and strategic advisory can further enhance your financial management, enabling you to focus on growth while staying prepared for any financial challenges ahead.

Month End Close Best Practices

These five best practices come from real-world experience working with businesses of all sizes. They’re practical steps you can start implementing right away, regardless of your team size or industry. Each practice builds on the others, creating a framework for consistent, accurate financial reporting.

1. Start Early
   Begin reconciliations as transactions occur rather than waiting until month-end.
2. Use Checklists
   Create detailed checklists for each team member and process.
3. Set Clear Deadlines
   Establish and communicate realistic deadlines for all tasks.
4. Document Everything
   Keep clear records of all adjustments and decisions.
5. Review and Improve
   Regularly assess your process for potential improvements.

Let us help you simplify your financial management with expert support and tailored solutions. Contact us today to learn how the best CFO services can optimize your month end close and drive better business decisions.

FAQs