10 Steps For A Faster And Accurate Month-End Close Process

month end close process

Every financial statement should be constructed carefully and with an eye for accuracy. Vital information such as cost of goods sold, net income, and depreciation must all be included for the financial statements to properly reflect business operations. Furthermore, any adjustments made during the course of the month should also be applied accordingly.

  • Record all of the receipts for items you purchased using petty cash.
  • But if you want to maintain the accuracy and consistency of your financial data, it is essential.
  • If transactions are not matching, then you have to perform account reconciliations to figure out the reason and make amendments.
  • By implementing the checklist, the accounting department can produce accurate financial statements on which all stakeholders can rely.
  • Automation ensures data is consistent across departments and compliant with regulations.

To ensure that everyone is informed of any changes and can modify their work accordingly, communication is essential. Different businesses may have a different way of execution for closing out the month. Here are some of the components of the accounting firm’s Professional Bookkeeping Online Bookkeeping Services, though.

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Complete and timely financial statements are the most powerful strategic tool for any organization. They help business owners measure progress towards goals, and they’re essential for performing an accurate cash flow projection for the future and making business decisions. Month-end closing is among the most critical accounting processes for every business. So, doing it in a hurry and making mistakes won’t help, especially if you plan to refer to these statements for your year-end close. Accurate monthly financial reports help you improve transparency and track KPIs correctly. If multiple teams are involved in the monthly closing process, then keeping track of the status of tasks is going to be a significant pain point.

month end close process

If you’re struggling to keep up with your books and the month-end close process, you can outsource your bookkeeping to Bench. Double-check your reports once more and then deliver them to the executive teams for reviewing and analysis. Plus, accurate monthly reporting makes year-end closing much easier to understand. Once all of these tasks are completed, you’ll be ready to follow the specific instructions for closing the books in QuickBooks, Netsuite, or Sage Intacct. Besides having a well-thought-out plan and month-end workflow, let’s review some best practices that can help make your end-of-the-month processes go as smooth as possible. But as we’ll see below, there’s a lot more to closing the books than making just a few journal entries.

Prepare Financial Statements

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Automated business processes not only allow standardization of operations but also ensure maintenance of records throughout the year, thereby creating an audit trail. According to a survey by Ventana Research,  in 2014, 58% of companies reported taking seven or more days to close their books. Adding to the stress and work levels is the deadline-oriented nature of the activity; the accounts must necessarily be closed by the last day of the month. The process of month end accounting close is indeed complicated because it involves various types of information and data that must be consolidated, verified and reconciled. Thus, an accountant must not only manage the day-to-day and end-of-year accounting activities, but also perform the month end close process. Naturally, accountants are overworked throughout the year, and accountancy has become a job that is never at rest.

Reconcile Accounts

You can get assistance with this and facilitate better the month-end close process with accounting software. After the reconciliation process is completed, it is time to generate financial statements and review the balance sheet, profit and loss statement, and cash flow. The accounting team’s ultimate objective during the month end close process is to produce accurate financial data so you can defend your business against financial difficulties.

What is closing process?

The Closing Process is a step in the accounting cycle that occurs at the end of the accounting period, after the financial statements are completed. This serves to get everything ready for the next year.

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