And, accurate financial statements cannot be procured without a timely and repeatable month end close process. A month end close process flowchart can help to keep your month end close process running smoothly. Once you have completed the previous steps, it’s time to prepare the required financial statements and reports. These will vary depending on different factors but tend to include summaries of the general ledger, balance sheets, and profit/loss statements.

A best practice is to formally close the books using the following four-step process and to include a password to set your numbers in stone. There’s a lot of pressure to get the books closed as fast as possible every month. Business owners and executives use last month’s financials as a starting point to make business decisions for the upcoming month. So the sooner they get final numbers, the sooner they can see what worked last month and what didn’t work so they can start making changes for the current month. However, just because your peers are closing faster,  you shouldn’t rush your month-end close. A better approach would be to steadily optimize your month-end process in a way that keeps errors at bay while reducing the close time.

Global E-Invoicing and Payment Software

With up-to-date records, you will save time catching up with your financials during the month-end process. But accounting for every transaction is key to avoiding discrepancies in your financial data. Prepare a bank reconciliation to reconcile your bank account with your financial records.

• Now that you’ve got the general month-end process down, you can start divvying up the tasks among your team members.
• Staying on top of your numbers and closing your books every month is important to keep your business on the right track.
• The person reviewing your accounting information could be a manager or supervisor who has experience handling your books.
• A cloud-based solution that makes it easy for accounting firms to manage client work, collaborate with staff, and hit their deadlines.
• Rising labor costs and shifting expectations are contributing to unprecedented change in the labor market and altering the way companies and their executives think about talent management.
• If you need more time to pay your suppliers, negotiate better credit terms in advance.
• You can carry out the month-end close procedure in an organized manner with the aid of the checklist.

The exact approach to the monthly closing process differs depending on the type of business and its specific accounting methodology. And some firms practice the annual version known as the year-end close. For business owners with no expertise in this area, you might consider partnering with an experienced accountant or accounting firm for chart of account set-up. This simple step could help you achieve an optimal balance between financial data collection and reporting detail.

Business is Our Business

The month end close process involves recording, reconciling, and reviewing all business transactions and finalizing the account data for the month. If you’re a small business owner who feels the month end close process is a mountain of tedious admin, you’re not alone. The monthly financial close is an important but time-consuming process that entrepreneurs don’t look forward to. It is challenging to manage a business without readily available financial statements.

If you find discrepancies, this is a trigger telling you that something needs to change with your processes. Furthermore, review your general ledger to https://www.bookstime.com/ ensure you’ve posted credit and debit entries correctly. Like all deadlines, the month-end close can be a source of tension for some organizations.

It’s Time To Automate Your Month-end Close

It’s easy to let transactions made from the petty cash fund go unrecorded. Since our founding in 2001, BlackLine has become a leading provider of cloud software that automates and controls critical accounting processes. Your success is our success.From onboarding to financial operations excellence, our customer success management team helps you unlock measurable value. Through workshops, webinars, digital success options, tips and tricks, and more, you will develop leading-practice processes and strategies to propel your organization forward. 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.

Our solutions complement SAP software as part of an end-to-end offering for Finance & Accounting. BlackLine solutions address the traditional manual processes that are performed by accountants outside the ERP, often in spreadsheets. Retailers are recalibrating their strategies and investing in innovative business models to drive transformation quickly, profitably, month end close process and at scale. Save time, reduce risk, and create capacity to support your organization’s strategic objectives. BlackLine’s foundation for modern accounting creates a streamlined and automated close. We’re dedicated to delivering the most value in the shortest amount of time, equipping you to not only control close chaos, but also foster F&A excellence.

Perform month-end close in 10 easy steps

Establishing a series of steps and assigning roles for different closing tasks sets expectations and provides clarity throughout the process. It also allows team members to pick up tasks quickly if someone is unavailable or out of the office. Reconciliation relies on consistency in departmental data and practices.

You will find it simple to close the books during the month-end close process if you consistently keep track of all transactions. 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.

Why It’s Important to Have a Modern Accounts Payable Month-End Close Process

A fully completed set of financials from the previous month can also be used as a foundation for next month’s business decisions, as a closing period highlights areas where you can improve. Check if you’ve posted debit and credit entries accurately for all the transactions. Next, review if you’ve posted your journal entries correctly into your general ledger.

• Ideally, the first step is to facilitate collecting and recording data as needed without waiting until the end of the month to start collecting receipts, invoices, bank statements, etc.
• The complexity of the process in part lies in the collaboration needed in different functions to promptly complete their tasks.
• Plus, having accurate monthly reports makes your year-end close much simpler.
• Check the fixed asset register to ensure that all assets are still in good working order.
• The bank reconciliation process is the same as the accounting reconciliation process.
• However, they also would likely prefer everything to be streamlined so that nothing slips through the cracks.

But not analyzing your financials and taking corrective action can be catastrophic for a small business. Review your accounts receivable to see if your customers are paying within the agreed credit term. Next, review if you’ve invoiced all your customers accurately and send any missing invoices. Here’s our month-end close checklist to help you organize your workflows. Small business owners have their plate full with daily business operations, so it’s normal to dread the month-end admin. It’s generally best to start with bank accounts, but it’s most important to implement a reconciliation system that works for you.

Why BlackLine Is Different from Other Month-End Close Platforms

Get help from a team member to find errors in the books that you missed. Review the general ledger and the aforementioned financial statements. HighRadius’ Autonomous Accounting can help your business make the month-end closing process faster, smoother, and error-free. Its AI-powered transaction detection system gives access to real-time data and helps spot errors.

If possible, increase the dollar limit for certain transactions to avoid pointless recording. It provides compliance and financial accuracy while preserving your data’s integrity for analysis planning. Spending and trading activity are somewhat predictable, but each month can introduce new issues that you and your teams need to consider.