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Here's my 80+ pg MEGA GUIDE on Month End Close


GUIDE on Month End Close




Month End Close is one of the most common tasks for an accounting function.


➡ What Exactly is a Month End Close?


While many may define this differently, to me, a month end close is a RECONCILIATION & SIGN OFF on a company’s financial statements


➡ What are the Steps in a Month End Close?


Here are my preferred steps:


1️⃣ CLASSIFY ALL TRANSACTIONS TO GL ACCOUNTS


All of your bank & credit card transactions should automatically flow through to your accounting software, allowing you to easily start classifying to your General Ledger accounts


When classifying accounts, keep these tips in mind:


⏩ Include a vendor / customer name on all transactions to allow for further reporting & analysis


⏩ Bulk classify transactions for the same vendor that belong to the same category to save time and stay efficient


⏩ Put all transactions you are unsure of to uncategorized expense / income, and revisit at the end. Don't let it hold up your month end close!


2️⃣ RECONCILE ALL BANK & CREDIT CARD ACCOUNTS


Bank reconciliations are IMO the most important piece of a month end close - without it, you don't have any credibility on the numbers being presented


Bank recs are a matching of the balances / transactions from your bank & credit card statements to your general ledger balances


3️⃣ BOOK ADJUSTING JOURNAL ENTRIES


Here comes the real work in a month end close - adjusting journal entries.


Common ones are Prepaid expenses, Deferred Revenue, Depreciation....the list is endless


The key here is to have rock solid workpapers, typically in excel, helping you both validate & calculate the adjustments / balances


4️⃣ CONFIRM ACCURACY & FINAL REVIEW


Here, it's time to zoom out and review all of your work - this is an important step!


I like to first start by scanning the month over month P&L, Balance Sheet, and Cash Flows for anomalies


🤔 Do any accounts show large swings in balances?


🤔 Are there any new accounts that can be merged with existing accounts?


🤔 Do any accounts have missing values?


From there, I'll do a final review on all transactions posted to ensure everything is coded correctly


Once you've completed the steps above - you're all set!


And you can then move onto distributing the financials, performing analysis, and so much more


Those are my guide tips for the Month End Close - everyone does it differently

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