The monthly close checklist we use for every client

A monthly close is the process that turns raw bank activity into a set of numbers you can actually make a decision from. Skip steps, and the P&L technically balances but quietly lies to you — a missed bill shows up as profit, an unreconciled account hides a shortfall. The checklist below is the one we run against every client's books, every month, in the same order.

Before you can close anything

• Every bank and card account reconciled to its statement, to the cent
• Every transaction categorised — nothing left sitting in a catch-all or "ask later" account
• Outstanding invoices and bills matched against what's actually been received or paid
• Payroll for the period recorded, including any accruals for days worked but not yet paid

The adjustments most books skip

This is where a close turns from "the bank account matches" into "the P&L is actually true." It's also the part that gets skipped under time pressure, because none of it shows up as an obvious error — the books still balance, they're just wrong.

• Prepaid expenses spread across the months they actually cover, not expensed on the day they were paid
• Depreciation recorded for the period
• Inventory or cost of goods adjusted to what was actually used or sold, not just purchased
• Accrued expenses for anything owed but not yet billed

Review before you call it closed

• Compare this month's result to last month and to the same month last year — explain anything that moved more than you'd expect
• Check the balance sheet, not just the P&L; a clean P&L sitting on a messy balance sheet is usually hiding something
• Confirm cash in the bank matches cash on the books, exactly
• Lock the period once it's reviewed, so nothing is edited into a month that's already been reported on

Twelve steps, run in the same order, every month, is what makes a close something you can set your clock by rather than something that happens whenever there's time. That consistency — not any single step on the list — is what actually makes the numbers trustworthy.