Month-End Close Process: Flowchart, Checklist, FAQ

To perform a month-end close, the business’s accounting team will review, record, and reconcile all account information to confirm that the data is accurate. BlackLine and our ecosystem of software and cloud partners work together to transform our joint customers’ finance and accounting processes. Together, we provide innovative solutions that help F&A teams achieve shorter close cycles and better controls, enabling them to drive better decision-making across the company. More than 4,200 companies of all sizes, across all industries, trust BlackLine to help them modernize their financial close, accounts receivable, and intercompany accounting processes. Standardize, accelerate, and centrally manage accounting processes – from month-end close tasks to PBC checklists – with hierarchical task lists, role-based workflows, and real-time dashboards. Additionally, NetSuite’s period close dashboard provides an overview of the progress of the close process and alerts users to any issues that need to be addressed.

Unfortunately, this process is time consuming and error prone, so finding an automated solution is essential. This month-end close checklist outlines not only the transactions, but also the growth of the company for each period. Also, the timelines depend on the specific situation of your company. The month-end closing process is critical to any business but can be very time-consuming.

Set a closing timeline

Take into account any external factors that could impact your timeline, such as holidays or vacations. Plan ahead and allocate additional time if necessary to avoid potential interruptions and ensure smooth progress towards completion. Automated payment reconciliation, built-in employee debit cards, and seamless approvals can all be done using the power of Spendesk. Customers say that our software saves approximately 4 days‘ worth of work at the end of each month. If done right, the order-to-cash cycle can provide your organization with improved cash flow and customer satisfaction, reduced costs and forward movement toward corporate sustainability.

• Even though you must not sacrifice quality for speed, you must also plan ahead to meet your month-end financial reporting deadlines.
• Then assign responsibilities and determine deadlines for each step to help the team effectively manage the process.
• To mitigate financial statement risk and increase operational effectiveness, consumer goods organizations are turning to modern accounting and leading best practices.
• All these conditions have negative long-term impacts on the company’s financial health and stability.
• This process also involves preparing balance sheets or income statements and making any necessary adjustment entries.

The team at CMA Exam Academy has the resources you need to make the right decision for your career. Learn more about managerial accounting and decide whether it’s the path for you. In this article, I’ll dig into the ins and outs of the month-end close process and why it’s necessary. Month-end closing ensures all of a business’s financials are in order and running smoothly. The accounting team will find and fix the error if the quotes do not match.

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For accounts receivable, ensure your customers pay within their agreed credit limits. For example, you might find that you can alter payment terms for your next accounting period. Once you close your books, you can’t go back and create journal entries for that month. So make sure your financials are accurate before closing the accounting period.

Streamlining the process also means teams can address any issues early in the closing process rather than waiting until after all data has been posted. Timely, reliable data is critical for decision-making and reporting throughout the M&A lifecycle. Without accurate information, organizations risk month end close process making poor business decisions, paying too much, issuing inaccurate financial statements, and other errors. To make a successful month-end close, accounts from the prior month require reconciliation and all transactions must be posted accurately into company’s financial books and records.

Step 9 – Review

A well-thought-out to-do list keeps accountants and management on the same page when it comes to receiving financial reports. Accounting reports contain a large amount of data and are subject to duplicate entries, omissions and other errors. These errors may be legitimate or an attempt to cover up fraud or theft. A month-end checklist helps accountants remember what they might otherwise skip. This process involves several steps your team will complete over several days, manually or with a closing software. Most accounting teams can provide answers due to their direct involvement in all the processes.

BlackLine partners with top global Business Process Outsourcers and equips them with solutions to better serve their clients and achieve market-leading automation, efficiencies, and risk control. By outsourcing, businesses can achieve stronger compliance, gain a deeper level of industry knowledge, and grow without unnecessary costs. Our API-first development strategy gives you the keys to integrate your finance tech stack – from one ERP to one hundred – and create seamless data flows in and out of BlackLine. Global brands and the fastest growing companies run Oracle and choose BlackLine to accelerate digital transformation. BlackLine delivers comprehensive solutions that unify accounting and finance operations across your Oracle landscape. Retailers are recalibrating their strategies and investing in innovative business models to drive transformation quickly, profitably, and at scale.

The income statement shows your company’s revenue and expenses over a specific period. The balance sheet provides an overview of your company’s assets, liabilities, and equity at a given point in time. The cash flow statement illustrates how money flows into and out of your business during the reporting period. Taking the time to complete each step thoroughly will help you meet deadlines with confidence while also providing valuable insights into the health of your business finances. One key reason why the month-end close process is important is that it provides stakeholders with up-to-date and accurate financial information. This information helps them make informed decisions regarding investments, budgeting, and strategic planning.