Month-End Close Checklist: Every Step, in Order, and Why It Is There

A month-end close checklist exists to prove three things about a period: that everything which happened was recorded, that nothing was recorded twice or invented, and that each transaction landed in the right month. The GAO and CIGIE Financial Audit Manual states the last of those as an assertion in one sentence: “Transactions and events have been recorded in the correct accounting period.” Every step below is there to support one of those three claims, and the order matters because later steps depend on earlier ones being finished.

The short version: set the cut-off, reconcile cash first, tie the subledgers to their control accounts, then post the entries that only a human decides on, review the result against last month, and lock the period. This page publishes no days-to-close target, because no credible current benchmark for one is published.

What a close is actually proving

The assertions come from AU-C 315 and are set out in the GAO and CIGIE Financial Audit Manual, Volume 1 (GAO-22-105894, June 2022, updated May 2023). Three of them drive a close:

• Completeness. “All transactions and events that should have been recorded have been recorded in the proper period and accounts.”
• Existence or occurrence. “Transactions and events have occurred during the given period, have been recorded in the proper accounts, and pertain to the entity.”
• Cutoff. “Transactions and events have been recorded in the correct accounting period.”

The same manual names the failure modes that go with them, including cutoff, where “transactions and events are recorded in the current period, but occurred in a different period,” and occurrence or validity, where “recorded transactions and events did not actually occur or do not pertain to the entity.”

That is the whole logic of the checklist. A bank reconciliation is not a ritual; it is the evidence for existence and completeness of cash. A cut-off date is not administrative; it is the control over which month a transaction belongs to. If you are still deciding which basis the books are kept on, cash vs accrual accounting settles that question first, because on the cash basis several of the steps below collapse into nothing and on the accrual basis they carry the entire result.

Step 0: write the schedule down and set the cut-off

The Financial Audit Manual, listing typical financial reporting controls, says that “appropriate processing procedures are used, including control totals, batch totals, edit checks, or other computerized controls. Written cutoff and closing schedules are also used.”

Written. That is the first step, and it is the one most often skipped. A close schedule names each task, the person who does it, the person who reviews it, and the day it is due. It is also what makes the close repeatable when the person who normally does it is away.

The cut-off itself is a decision, not a fact: pick the date after which nothing further posts to the month, tell everyone who can create a transaction, and hold it. Late invoices, expense claims and bills submitted after that date go into the next period or through a documented accrual, not quietly into the closed month.

The checklist, in order

1. Declare the cut-off

Covered above. It comes first because every reconciliation below is a statement about a period with a defined end.

2. Reconcile every bank account

Cash is the only balance an independent third party will confirm for free every month, which makes it the anchor for the rest of the close. Reconcile each account to the statement, not to the feed: bank feeds miss items, duplicate items, and occasionally re-post items after categorization. Investigate the reconciling items rather than forcing them. Outstanding checks that never clear, deposits in transit that span more than a few days, and unexplained differences are findings, not noise.

The Green Book’s control category behind this is access restrictions and accountability for resources and records, where “management may periodically compare resources with the recorded accountability to help reduce the risk of errors, fraud, misuse, or unauthorized alteration.”

3. Reconcile credit cards and payment processors

Same logic, harder practice. Merchant processors and payment platforms settle net of fees, so the deposit in the bank is not the revenue, and the gap is fees, refunds, chargebacks and holdbacks. Reconcile gross activity to the processor’s own statement and let the fee line stand on its own. Card accounts get reconciled to the statement for the same reason bank accounts do, and employee cards need the receipts attached before the period closes rather than after.

4. Tie accounts receivable to the control account

The aging report’s total and the general ledger control account must agree. When they do not, the cause is usually a journal entry posted directly to the control account, a credit note applied outside the subledger, or a payment recorded against the wrong customer. Fix the cause rather than plugging the difference. Then read the aging itself: old balances that will not be collected are a provision decision, not a reconciliation problem, and that decision belongs to the owner or controller and gets documented.

5. Tie accounts payable, and look for unrecorded liabilities

The same tie applies to the payables subledger. The completeness assertion also demands the harder question: what was incurred in the month and has not yet been entered. The standard procedure is to look at what was paid in the first weeks after the period end and ask which month each of those invoices belongs to, plus the ones sitting unentered in an inbox. On the accrual basis, an unrecorded supplier invoice is an understated expense and an overstated profit.

6. Inventory and cost of sales

For a business carrying stock, this is where most closes go wrong, because the cut-off question is physical: goods received but not invoiced, goods shipped but not billed, and goods counted that had already been sold. The Green Book names physical control over vulnerable assets as its own control category, where “management periodically counts and compares such assets to control records.” Count, compare to the record, and post the adjustment with an explanation of what the variance was.

7. Post accruals and prepaids

This is the step that converts a list of transactions into a month’s result. Accruals record what was incurred and not yet billed; prepaids move what was paid in advance into the periods it belongs to. Keep a schedule for each recurring item, so the entry is a maintenance task rather than an act of memory, and so the reversal in the following month is not forgotten. On a pure cash basis this step does not apply.

8. Fixed assets and depreciation

Additions and disposals get recorded in the fixed asset register first, then depreciation follows from it. The IRS describes depreciation as “an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property,” and ties the start of it to service rather than to purchase: “you place property in service when it is ready and available for a specific use, whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity.” It ends when the cost is fully recovered or the property is retired from service, whichever happens first.

Book depreciation and tax depreciation are different calculations serving different purposes, and which method and life apply to an asset is a question for the business’s own tax adviser. What the close requires is that the register agrees to the balance sheet and that new assets have actually been added to it.

9. Reconcile payroll liabilities

Wages, withholding, employer taxes and benefit deductions each leave a balance that should clear on a known schedule. Reconcile each liability account to the payroll provider’s reports and to what was actually remitted. A balance that grows month after month is a missed deposit or a misposted entry, and both are worth finding before a notice arrives.

The deposit rules come from the IRS, which states that “there are two deposit schedules, monthly and semi-weekly,” and that “before the beginning of each calendar year, you must determine which of the two deposit schedules you are required to use.” Under the monthly schedule the IRS directs employers to deposit employment taxes on payments made during a month by the 15th day of the following month. Form 941 is filed for each quarter by the last day of the month that follows the end of the quarter. Which schedule applies to a given employer is determined under the rules in IRS Publication 15, and a payroll provider or accountant should confirm it rather than an article.

10. Sales tax and other amounts held for someone else

Sales tax collected is not revenue; it is money held on behalf of a state. Reconcile the liability account to what was collected in the period and to what was filed and paid. Sales tax is administered state by state, so the filing frequency, the due dates and the rules on what is taxable come from the revenue department of each state where the business is registered, and those are the authorities to ask. Tips held for staff, customer deposits and unearned revenue belong in the same part of the checklist for the same reason: none of them is yours, and each has a subledger or schedule it should agree to.

11. Intercompany and owner accounts

Where a group has more than one entity, each side of an intercompany balance has to agree to the other before consolidation, and any difference is a real error in one of the two ledgers. Owner and shareholder accounts deserve the same attention in a small company: personal expenses run through the business, owner draws and loans to and from the company all change the tax picture and all need to be identified in the month they happen rather than reconstructed a year later.

12. Review and approve the journal entries

The Financial Audit Manual states the control plainly: “journal entries are prepared, reviewed, compared with supporting details where necessary, and approved each accounting period, including year-end closing.” Someone other than the preparer looks at the manual entries, with the support attached, before the period is treated as closed. That is the whole control, and it is the one most often dropped when a close runs late.

13. Review the numbers, then lock the period

Compare the month against the prior month and against the budget, and get an explanation for every material movement. The same manual describes the control: “reports are periodically compared with underlying documents and evaluated by supervisory personnel. Procedures are implemented to detect and correct misstatements and to evaluate recorded balances.” A variance you cannot explain is usually a coding error, a missing accrual or a duplicate, and finding it now is cheaper than finding it in an audit.

Then lock the period in the accounting system so that later entries cannot change a month that has already been reported. Keep the reconciliations, the schedules and the approvals together with the period, because the file is the evidence that the work was done.

Where software does the work, and where it does not

Software changes which steps take time. It does not remove the review.

• Bank feeds and reconciliation. QuickBooks Online and Xero both import bank transactions and reconcile accounts against them, which is steps 2 and 3 in bulk. The judgment about unreconciled items is still yours.
• Period locking. Closing or locking a period after it is reported is what stops step 13 from being undone. Rillet documents this in more detail than most: periods and subledgers lock by entity with every lock logged, and journal entry approvals can be routed by materiality, for example entries over $50,000 to a controller and over $500,000 to a CFO.
• Close checklists and variance review inside the ledger. Campfire builds close checklists, account reconciliation and flux analysis, meaning the explanation of month-over-month changes, into the accounting system rather than a separate tool.
• Accrual books from day one. Puzzle keeps cash and accrual books side by side on every plan from $30 a month, and builds deferred revenue schedules from connected sources on its higher plans, which is step 7 for a subscription business.
• Close tracking across a book of clients. For a firm closing dozens of sets of books, the tracking lives in the practice system rather than the ledger. Financial Cents sells a Month-End Close add-on at $5 per client per month billed annually; Double is priced per connected client at $10, $25 or $50 a month and names accruals, allocations, AI reconciliation fixes and flux analysis among its features; Client Hub includes a QuickBooks month-end close feature on its Solopreneur and Practice Manager PLUS tiers. All prices as of September 2026. Accounting practice management software compares them, and client accounting services covers the economics of running that work at scale.

Vendor claims about speed are the vendors’ own. Campfire says customers close three to ten days faster, and Puzzle offers a money-back guarantee if a close is not 50 percent faster within 60 days, subject to conditions. Those are marketing positions, not measured results.

When one person does everything

A small business with one or two people in finance cannot fully segregate duties, and the Green Book, which is the federal internal control standard, addresses that directly rather than pretending otherwise. Segregation of duties is one of its named control categories, and it describes the division of “key duties and responsibilities among different people to reduce the risk of error, misuse, or fraud,” separating authorization, processing and recording, review, and custody of the related assets. Where an organization cannot do that, the Green Book sets out how to respond to the higher risk: “by adding additional levels of review for key operational processes, reviewing randomly selected transactions and their supporting documentation, taking periodic asset counts, or checking supervisor reconciliations.”

In a business with one bookkeeper, that translates into a monthly habit: the owner opens the bank statement themselves and compares it to the reconciliation, looks at a handful of transactions and their receipts, and signs off the close. It takes twenty minutes and it is the only compensating control most small companies have.

How long should a close take?

No number appears on this page, and that is deliberate. There is no current, publicly published benchmark for days to close that names its sample and its method, and the figures circulating are either vendor marketing or lead-capture downloads. Judge a close by whether every step above was completed, reviewed and evidenced, and by whether the same steps happen in the same order every month.

What is worth tracking internally is the trend: your own days from period end to locked books, month over month, and the number of adjusting entries made after the first draft of the statements. Both of those tell you whether the process is improving without pretending to compare you to anyone else.

Who to bring in, and when

A bookkeeper can run this checklist. A controller or an outsourced accounting firm adds the review layer that steps 12 and 13 assume exists, and that is the hire to consider when the person doing the close is also the person approving it. Where a lender, an investor or a buyer asks for a compilation, a review or an audit, that report must come from a licensed CPA firm, and the accuracy of the close is what determines how expensive that engagement becomes. Our directory lists CPA firms by state and city; where the need is forecasting and a reporting pack built on top of a reliable close, fractional CFO work is the better description of the hire. Nothing here is tax advice, and specific questions about payroll deposits, depreciation or sales tax belong with your own adviser or the relevant agency.

Frequently Asked Questions