What is month-end close?
The month-end close turns a month of raw transactions into trustworthy numbers. Once closed, the period is usually locked so it can't be changed without review.
Month-end close checklist
- Record all sales [invoices](/glossary/invoice) and supplier bills.
- Reconcile every bank, card and loan account (see [bank reconciliation](/glossary/bank-reconciliation)).
- Review [accounts receivable](/glossary/accounts-receivable) and [accounts payable](/glossary/accounts-payable) ageing.
- Post [accrued expenses](/glossary/accrued-expenses) and [accrued income](/glossary/accrued-income).
- Adjust [prepaid expenses](/glossary/prepaid-expenses) and [deferred revenue](/glossary/deferred-revenue).
- Record depreciation and amortization.
- Count or review inventory.
- Record payroll and payroll taxes.
- Reconcile tax accounts such as VAT or sales tax.
- Review the [trial balance](/glossary/trial-balance) and investigate unusual balances.
- Produce and review management reports.
- Lock the period.
How long should it take?
Many small businesses close within 5 to 10 working days. Automation, bank feeds and a consistent checklist can bring it down to a few days.
Why it matters
A disciplined close catches errors early, makes [year-end close](/glossary/year-end-close) and audits much easier and gives owners timely numbers for decisions.