The month-end close turns a month of transactions into numbers you can rely on: cash reconciled, revenue and expenses in the right month, every balance sheet account explained, and a reviewer’s sign-off before anything goes out. This checklist lays out that work by business day, in the order a controller runs it.
What the checklist covers
The list is written for a small or mid-size US company that keeps its books on the accrual basis. It has 44 tasks in 9 areas: cash, revenue & receivables, expenses & payables, payroll, prepaids & accruals, fixed assets, balance sheet reconciliations, taxes, and reporting & review. Most tasks are monthly. The few that only come due at quarter-end or year-end are marked.
Each task has a target business day. BD1 is the first business day after month-end, so a BD3 task for September is due on the third working day of October. Counting in business days keeps the schedule the same every month, whatever day of the week the month ends on.
The close calendar
The order matters more than the exact days. Cash and cutoff come first because everything after depends on them: accounts payable cannot be reconciled until every bill for the month is entered, and a flux review means little until the reconciliations are done. This is how the monthly tasks fall:
| Day | Due that day |
|---|---|
| BD1 | Record bank fees and interest income; Confirm all invoices for the month are issued; Confirm prior-month accruals reversed |
| BD2 | Accrue unbilled revenue; AP cutoff: enter all bills for the month; Code and approve employee expense reports; Record payroll journal entries; Amortize prepaid expenses |
| BD3 | Bank reconciliations; Merchant processor clearing reconciliation; Deferred revenue rollforward; AR aging review and collections follow-up; AP aging review; Accrue wages earned but unpaid; Accrue expenses received but not billed; Capitalize additions and record disposals; Record depreciation and amortization |
| BD4 | Reconcile payroll liabilities; Update lease schedules; Reconcile fixed asset register to GL; Reconcile accounts receivable to aging; Reconcile accounts payable to aging; Reconcile loans and lines of credit; Reconcile sales tax payable |
| BD5 | Clear suspense and clearing accounts; Reconcile related-party and intercompany balances; Trial balance scrub |
| BD6 | Flux analysis; Prepare monthly financial package |
| BD7 | Controller review and sign-off; Lock the period in the accounting system |
On this schedule the books are reviewed, signed off and locked on BD7. The first close on a new checklist usually takes longer, and the time comes down as recurring entries and reconciliations become routine.
The full month-end close checklist
Grouped by area. Indented tasks are parts of the task above them, such as the individual accounts inside bank reconciliations.
Cash
| Task | Due | How often | What it involves |
|---|---|---|---|
| Record bank fees and interest income | BD1 | Monthly | Book service charges, wire fees and interest from the month-end bank statements. |
| Bank reconciliations | BD3 | Monthly | Reconcile every bank and card account to its statement; investigate reconciling items older than 30 days. |
| ↳ Operating account | BD2 | Monthly | Tie the GL balance to the statement and list outstanding checks and deposits in transit. |
| ↳ Savings / money market | BD2 | Monthly | Agree the balance to the statement and record interest earned. |
| ↳ Credit cards | BD3 | Monthly | Reconcile each card to its statement and make sure every charge is coded with a receipt. |
| Merchant processor clearing reconciliation | BD3 | Monthly | Tie Stripe / Square / PayPal payouts to bank deposits and book processing fees and refunds. |
Revenue & receivables
| Task | Due | How often | What it involves |
|---|---|---|---|
| Confirm all invoices for the month are issued | BD1 | Monthly | Compare billing to contracts, timesheets and shipments so nothing billable is left out of the month. |
| Accrue unbilled revenue | BD2 | Monthly | Record revenue earned in the month but not yet invoiced, with support for each accrual. |
| Deferred revenue rollforward | BD3 | Monthly | Recognize revenue earned from prior billings and defer amounts billed for future periods. |
| AR aging review and collections follow-up | BD3 | Monthly | Clear unapplied cash and credits, and flag past-due balances over 60 days for follow-up. |
| Bad-debt reserve review | BD4 | Quarterly | Reassess the allowance for doubtful accounts against the aging and write off uncollectible balances. |
Expenses & payables
| Task | Due | How often | What it involves |
|---|---|---|---|
| AP cutoff: enter all bills for the month | BD2 | Monthly | Enter every vendor bill for goods and services received through month-end; chase missing invoices. |
| Code and approve employee expense reports | BD2 | Monthly | Make sure all reimbursable expenses incurred in the month are submitted, approved and posted. |
| AP aging review | BD3 | Monthly | Look for duplicate bills, unapplied vendor credits and stale items that need follow-up. |
| 1099 vendor review | BD5 | Annual | Confirm W-9s are on file and 1099 eligibility and amounts for every contractor paid this year. |
Payroll
| Task | Due | How often | What it involves |
|---|---|---|---|
| Record payroll journal entries | BD2 | Monthly | Post each payroll run from the register, split by department, including employer taxes and benefits. |
| Accrue wages earned but unpaid | BD3 | Monthly | Accrue gross pay, bonuses, commissions and employer taxes for days worked after the last pay date. |
| Reconcile payroll liabilities | BD4 | Monthly | Tie payroll tax, benefits and 401(k) liability accounts to provider reports and remittances. |
| PTO accrual true-up | BD4 | Quarterly | Adjust the accrued vacation liability to the balances in the payroll or HR system. |
Prepaids & accruals
| Task | Due | How often | What it involves |
|---|---|---|---|
| Confirm prior-month accruals reversed | BD1 | Monthly | Check that auto-reversing entries posted so last month’s accruals are not double-counted. |
| Amortize prepaid expenses | BD2 | Monthly | Expense this month’s portion of insurance, software, rent and other prepaids per the schedule. |
| Accrue expenses received but not billed | BD3 | Monthly | Accrue utilities, professional fees and other services used in the month without a bill yet. |
| Annual insurance and prepaid true-up | BD4 | Annual | Re-schedule renewed policies and contracts and true up any prepaid balance that no longer has a benefit. |
The prepaid expense amortization schedule template builds the schedule behind the amortization entry, with a rollforward that ties to the balance sheet.
Fixed assets
| Task | Due | How often | What it involves |
|---|---|---|---|
| Capitalize additions and record disposals | BD3 | Monthly | Review repairs and equipment spend for items above the capitalization threshold; retire disposed assets. |
| Record depreciation and amortization | BD3 | Monthly | Post depreciation and amortization from the fixed asset register. |
| Update lease schedules | BD4 | Monthly | Record lease expense and roll forward right-of-use assets and lease liabilities (ASC 842). |
| Reconcile fixed asset register to GL | BD4 | Monthly | Agree cost and accumulated depreciation by asset class to the balance sheet. |
Balance sheet reconciliations
| Task | Due | How often | What it involves |
|---|---|---|---|
| Reconcile accounts receivable to aging | BD4 | Monthly | The AR aging total must equal the GL; explain any difference. |
| Reconcile accounts payable to aging | BD4 | Monthly | The AP aging total must equal the GL; explain any difference. |
| Reconcile loans and lines of credit | BD4 | Monthly | Agree balances to lender statements, split principal from interest and accrue unpaid interest. |
| Clear suspense and clearing accounts | BD5 | Monthly | Uncategorized, suspense and clearing accounts should be at or near zero at month-end. |
| Reconcile related-party and intercompany balances | BD5 | Monthly | Agree due to / due from balances with the other entity or owner and settle stale items. |
| Equity rollforward | BD5 | Quarterly | Roll forward equity for contributions, distributions, stock activity and net income. |
Taxes
| Task | Due | How often | What it involves |
|---|---|---|---|
| Reconcile sales tax payable | BD4 | Monthly | Tie the sales tax liability to the sales tax report and payments made. |
| Sales tax filing review | BD5 | Quarterly | Review quarterly returns by jurisdiction before filing and confirm payment dates. |
| Income tax estimate and provision | BD5 | Quarterly | Calculate quarterly federal and state estimated payments and book the income tax provision. |
Reporting & review
| Task | Due | How often | What it involves |
|---|---|---|---|
| Trial balance scrub | BD5 | Monthly | Scan the TB for wrong-sign balances, miscellaneous accounts and unusual manual entries. |
| Flux analysis | BD6 | Monthly | Explain significant changes so the numbers make sense before they go out. |
| ↳ Income statement vs prior month and budget | BD6 | Monthly | Comment on every line that moved more than your threshold (e.g. 10% and $5k). |
| ↳ Balance sheet vs prior month | BD6 | Monthly | Explain material balance changes and confirm each one ties to a reconciliation. |
| Prepare monthly financial package | BD6 | Monthly | P&L, balance sheet, cash flow and KPIs with short commentary for management. |
| Controller review and sign-off | BD7 | Monthly | Final review of reconciliations, entries and the package before release. |
| Lock the period in the accounting system | BD7 | Monthly | Set the closing date so nothing can be posted into the closed month. |
| Year-end audit PBC prep | BD7 | Annual | Assemble the auditor’s prepared-by-client list: rec binders, schedules and support. |
How to use it
- 1
Cut it to fit
Delete what does not apply and add what is specific to you: inventory counts, a second entity, grant reporting. A checklist people trust lists only work your team does.
- 2
Give every task two names
A preparer does the work and a reviewer checks it. One person signing both sides is the most common control gap in a small finance team, and the review is where errors get caught.
- 3
Keep the support with the task
A reconciliation is the statement, the ledger balance and an explanation of every difference. Save the support where a reviewer or an auditor can follow it without asking.
- 4
Record the day you finish
Note the business day the close was signed off each month. The trend shows whether the process is getting faster and which tasks hold it up.
- 5
Lock the period
Once the reviewer signs off, set the closing date in your accounting system so nothing can post into the closed month.
Where closes usually go wrong
- Accruals that never reverse. Last month’s accrual stays on the books and the expense lands twice. That is why the checklist opens by confirming the reversals posted.
- Suspense accounts left to grow. Uncategorized and clearing accounts should be at or near zero at month-end. A balance that grows every month is unreconciled work.
- Reconciling without investigating. A reconciliation that carries the same outstanding items month after month has stopped doing its job. Anything older than 30 days needs an answer.
- Weak cutoff. A bill for September services recorded in October puts the expense in the wrong month, and the same goes for invoices and revenue. The billing and AP cutoff tasks exist to catch it.
- Changing a closed month. An entry posted into a closed period changes numbers that were already reported. Lock the period, and record late adjustments in the open month with a note explaining them.
Frequently asked questions
What is a month-end close checklist?
A list of every task needed to finish the books for a month, with a preparer, a reviewer and a due date for each. It makes the close repeatable: the same work in the same order every month, with a record that each step was done and checked.
How long should the month-end close take?
It depends on the size of the company and how current the books are during the month. This checklist is scheduled to sign off on the seventh business day. Teams that keep transactions categorized and reconciled through the month close faster, because the close becomes a review of work already done.
Which accounts should be reconciled every month?
Every bank and credit card account, merchant processor clearing accounts, accounts receivable and payable against their agings, payroll liabilities, loans and lines of credit, fixed assets against the asset register, sales tax payable, and any suspense, clearing or intercompany accounts. Each one should tie to an outside statement or a subledger.
What is the difference between a month-end and a year-end close?
A year-end close is a month-end close plus the annual tasks: the 1099 vendor review, the insurance and prepaid true-up and, if you are audited, the auditor’s prepared-by-client list. The quarterly tasks, such as the equity rollforward, the sales tax filing review and the income tax estimate, fall in the last month of the year too.
Can I use the template in Google Sheets?
Yes. Upload the Excel file to Google Drive and open it with Google Sheets. The columns and dropdowns carry over.
What does BD1 mean?
The first business day after month-end. Weekends and US federal holidays are not counted, so BD3 is always the third working day of the new month.