An Entrepreneurs Guide to the Month-end Close Process

But trying to chase down updates in Slack messages, via email, or in person can slow you down. The month-end process starts just before the end of every month, when you’re doing prep work like wrapping up outstanding vendor invoices. Business partners are no longer content with long reporting cycles—they want faster insights from financial information. And you get faster insights by automating tedious, time-consuming tasks. A good understanding of the month-end close process will help you manage your business better.

A thorough review allows you to feel confident in your month-end close. If you find any errors or areas of concern–such as overspending within a specific department–address them https://simple-accounting.org/bookkeeper360-app-xero-integration-reviews/ right away. This process involves several steps your team will complete over several days. The month-end closing process is complicated and might vary for every business.

Month-end Close Process Framework

Your client’s financial data might reside in different places—like bank statements, accounting software, enterprise resource planning (ERP) software and spreadsheets. The End Close is a series of review and reconciliation tasks that accountants do to update a company’s financial information for the accounting period, which could be a month, quarter, or year. This keeps your client’s financial transactions of the previous month, quarter, or year 20 Best Accounting Software for Nonprofits in 2023 from mixing up with those of the next month, quarter, or year. There is no doubt that month-end closing and reporting procedures can greatly benefit your company’s finances. Still, there is also no doubt that it can be a time-consuming and exasperating process when done manually – especially if you leave it all to the last moment. Fortunately, many of the tedious, repetitive tasks can be automated for improved efficiency and reliability.

They are well-versed in all bookkeeping activities and can add value to your business. You need to check the funds available in petty cash at the start and end of the month. Reconcile all your deposits and receipts so that you can identify any discrepancies. If you do not have another person you can ask to review your information, double and triple check your own work to ensure the information is accurate. Reviewing statements can help you catch issues early on, like overspending, and prevent problems later on with your books.

Inconsistent accounting standards

Due to the amount of moving parts and data required to perform the month end close process, it’s helpful to have a checklist for reference. Knowing when and where your team is spending money is at the core of effective spend management. If you’re still using pen-and-paper accounting practices, you may not have real-time records of all your purchases for the month. To ensure your month-end close is as smooth and painless as possible, it pays to follow a month-end close checklist. A checklist will help you keep track of essential information and minimize time-consuming errors and redundancies.

Since our founding in 2001, BlackLine has become a leading provider of cloud software that automates and controls critical accounting processes. Your success is our success.From onboarding to financial operations excellence, our customer success management team helps you unlock measurable value. Through workshops, webinars, digital success options, tips and tricks, and more, you will develop leading-practice processes and strategies to propel your organization forward. BlackLine’s foundation for modern accounting creates a streamlined and automated close. We’re dedicated to delivering the most value in the shortest amount of time, equipping you to not only control close chaos, but also foster F&A excellence.

Set Up Closing Dates and Define Month-End Close Procedures

Make a thorough month-end close checklist to ensure you have all the information required to finish the process. You can carry out the month-end close procedure in an organized manner with the aid of the checklist. Therefore, there is no need for you to repeatedly waste time looking for the necessary information every month. You can identify irregularities and potentially fraudulent transactions in your financial data through account reconciliation. It will provide you with a clear picture of your account’s financial situation. A closing goal is critical for the process to flow smoothly and finish on schedule.