A month-end close checklist for small businesses

Monthly financial statements are only useful if they are reliable and on time. A simple, repeatable close routine turns bookkeeping into management information you can act on, and makes year-end, HST filings and lender requests far easier.

The checklist

1. Record all sales and invoices for the month, and confirm invoice numbering has no gaps.
2. Enter all supplier bills and expenses, including card receipts and reimbursements.
3. Reconcile every bank account to the statement balance, and investigate old outstanding items.
4. Reconcile credit cards and loans, including interest and principal splits on loan payments.
5. Review accounts receivable aging: follow up overdue accounts and consider whether any balances are doubtful.
6. Review accounts payable aging for duplicates, missing bills and credits not applied.
7. Record accruals and prepaids: expenses incurred but not yet billed, and payments that relate to future months.
8. Reconcile payroll and source deductions so the liability matches what is due to CRA.
9. Reconcile GST/HST accounts to the amounts you will report on your return.
10. Update inventory and fixed assets, including monthly amortization if you track it.
11. Review the statements: compare revenue, gross margin and key expenses to last month, last year and budget, and explain large variances.
12. Lock the period in your accounting software so completed months cannot be changed accidentally.

Making it stick

• Set a deadline. Aim to close within ten business days of month-end, then tighten it.
• Assign owners. Each step needs a named person, even in a two-person business.
• Automate the routine. Bank feeds, recurring entries and receipt capture remove most manual keying.
• Keep a short reporting pack. A one-page summary of cash, revenue, margin, receivables and payables is often more useful than a full set of statements.