What “Month end Close” means:

1.       For accounts that provide statements (bank and credit cards typically) reconcile to be sure all activity has been recorded and the balance shown is correct.

2.       Be sure other account balances in General Ledger are correct.  Especially receivables and payables.

3.       Alert staff / owners to problems that are getting old

4.       Make those entries that do not run through the bank account. Depreciation, amounts to be received or to be paid in the future.

5.       File needed taxes – and record taxes payable in the future

6.       Review sales and revenue accounts. Check that everything is recorded and is recorded in the best month? Ensure underlying costs “costs of sales” are matched to the revenue.

7.       Review expense accounts for the correct account assignment and the correct month. Balances should be consistent from month to month. If not, we should understand why.

The financial statements are ready:

1.       A monthly discussion is key. We find ways to improve performance of both revenue and expenses, we see warnings of potential problems or large cash demands, we understand both short term and long term opportunities.

2.       Once a few months of correct financial information is available, it is possible to forecast performance and cash flow into the future.