Month-End Close Checklist for Bookkeepers (2026)
The month-end close is the bookkeeper's marathon. Done well, it gives business owners clean financials by the 10th. Done badly, it becomes an ever-growing backlog that swallows entire weeks. Here's a 15-step process that works.
Why the month-end close matters
Every set of management accounts starts with the month-end close. Every informed business decision depends on it. Every quarter-end, year-end, audit, and tax filing builds on top of it. If you get the monthly close right, everything downstream is easier. If you don't, you're stacking months of unchecked entries on top of each other and hoping nothing went wrong.
Things always go wrong.
A supplier invoice gets posted to the wrong nominal code. A bank transfer between accounts gets recorded as income. A direct debit changes amount and nobody notices for three months. A payroll journal gets duplicated. These are mundane errors, not dramatic ones, but left unchecked they compound. By the time you're preparing year-end accounts, you're not doing accounting - you're doing forensics.
The month-end close is the checkpoint. It's where you catch those errors while they're fresh, while the bank statement still makes sense, while you can still remember why that odd payment went out. The goal is simple: every account reconciled, every entry accounted for, every balance defensible. Then you close the period and move on.
What follows is a 15-step process that works for sole practitioners, in-house bookkeepers, and practice teams managing dozens of clients. It's written to be practical enough that you could print out the summary at the end and pin it to your wall.
Before you start: prerequisites
Don't start the month-end close until you have everything you need in front of you. Stopping mid-process to chase a missing statement or wait for payroll figures breaks your momentum and introduces errors. Gather these first:
Month-End Prerequisites
| Bank statements | All current, savings, and deposit accounts for the full month. Download or connect feeds before you begin. |
| Credit card statements | Corporate and business cards, including any employee cards that feed into the business. |
| Outstanding invoices list | Both sales (AR) and purchase (AP). Pull aged debtor and creditor reports from your platform. |
| Payroll summary | Gross pay, employer NI/FICA, pension contributions, net pay, and any payroll journal your payroll provider generates. |
| Manual journal list | Depreciation schedules, prepayment/accrual calculations, and any recurring journals due this period. |
| Prior month's trial balance | Your reference point. If last month wasn't closed cleanly, you have two problems, not one. |
If you're managing multiple clients, batch this preparation. Download all statements for all clients first, then work through the close process client by client. Context-switching between gathering data and processing it is where time disappears.
The 15-step month-end close checklist
Download and import all bank statements
Pull statements for every bank account the business operates - current accounts, savings accounts, deposit accounts, PayPal, Stripe, and any other payment processors. If you're using bank feeds, confirm they've synced through to the last day of the month. If you're importing CSVs, check the date range covers the full period with no gaps. A missing day at month-end is a surprisingly common oversight, especially with bank feeds that have a 24-48 hour delay.
Reconcile every bank account
Match every transaction on the bank statement to a corresponding entry in your accounting software. The closing balance on the bank statement should match the reconciled balance in your books. If it doesn't, find out why before moving on. Common culprits: timing differences (cheques issued but not yet cleared), duplicate entries, transactions coded but not matched, or bank feeds that imported a transaction twice. Don't accept a "near enough" reconciliation - the difference will still be there next month, plus whatever new differences accumulate on top of it.
Reconcile credit card accounts
The same process as bank accounts, but credit cards deserve their own step because they're often treated as an afterthought. Reconcile each credit card statement to the corresponding liability account in your books. Watch for: personal expenses on business cards (flag for the business owner to reimburse or journalise out), annual fees that hit once a year, and foreign currency transactions where the posted amount differs from the original charge due to exchange rate movements.
Review and post petty cash
If the business maintains a petty cash float, collect all receipts for the month, post the expenses to the appropriate nominal codes, and reconcile the physical cash balance to the petty cash account in the books. If the business doesn't use petty cash formally but the owner regularly pays for small items out of pocket, now is the time to post those expenses and record the reimbursement (or director's loan adjustment). Petty cash that's "roughly right" is never roughly right.
Review accounts receivable - chase overdue invoices
Run the aged debtors report. Every invoice that was due for payment within the month should either be matched to a bank receipt or flagged as overdue. This step has two purposes: first, you confirm that receipts have been correctly allocated to invoices (not just dumped into a generic income code). Second, you identify overdue invoices that need chasing. The month-end close is the natural moment to send the business owner a list of who owes what and how long it's been outstanding. For any invoices that are genuinely irrecoverable, discuss with the business owner and process the write-off.
Review accounts payable - ensure all bills are entered
The mirror image of step 5. Run the aged creditors report and confirm that all supplier invoices for the month have been entered. Check the email inbox or document management system for any invoices that arrived late in the month and haven't been posted. Look at recurring suppliers - if you normally receive a monthly invoice from a particular vendor and it hasn't appeared, follow up. An unrecorded bill means understated expenses and overstated profit, which matters for management reporting and VAT/sales tax calculations.
Reconcile payroll entries
Post the payroll journal for the month. This should break down into: gross salaries and wages, employer's National Insurance (UK) or FICA (US), employer pension contributions, and net pay. Reconcile the net pay figure to the actual bank payments. Check that PAYE/NIC liabilities (UK) or payroll tax withholdings (US) match what's due to HMRC or the IRS. If the business uses a separate payroll provider, confirm their journal matches the payments that flowed through the bank account. Payroll is the area where errors have the most immediate human consequences, so get it right.
Review prepayments and accruals
Release the month's portion of any prepaid expenses (annual insurance premiums, software subscriptions paid upfront, rent paid in advance). Accrue for expenses that relate to this month but haven't been invoiced yet (utility bills that arrive in arrears, professional services used but not yet billed). This is the step that separates cash-basis bookkeeping from accrual-basis bookkeeping, and it's the step that makes management accounts meaningful. Without it, a month where the annual insurance premium lands looks artificially expensive, and the other eleven months look artificially cheap.
Process depreciation journals
Post the monthly depreciation charge for all fixed assets. If you maintain a fixed asset register (and you should), the monthly journal is a straightforward calculation: annual depreciation divided by twelve. Check whether any assets were purchased or disposed of during the month and adjust accordingly. For disposals, calculate the gain or loss and post it. Depreciation is one of those entries that's easy to forget because no cash moves, but skipping it materially misstates the balance sheet and overstates profit.
Review inter-company transactions (if applicable)
If the business is part of a group or has related entities, reconcile inter-company balances. Every pound or dollar owed by one entity should be receivable by the other, at the same amount, as at month-end. Inter-company mismatches are one of the most common causes of consolidation headaches. Even for small businesses, if the owner has a director's loan account or regularly moves money between a trading company and a property company, those balances need to agree.
Review suspense and clearing accounts
Suspense accounts should have a zero balance at month-end. That's their entire purpose - they're holding bays for transactions you haven't yet classified. If there's a balance sitting in suspense, investigate it, code it correctly, and clear it out. The same applies to any clearing accounts used for bank transfers between accounts, VAT control accounts (which should net to the amount currently owed or reclaimable), and any other temporary holding accounts. A non-zero suspense account at month-end is an open question, and open questions have a way of becoming permanent mysteries if left for too long.
Run the trial balance and check for anomalies
Pull the trial balance and scan it. You're looking for: accounts with unexpected balances (a liability account showing a debit balance, or vice versa), unusually large or small balances compared to prior months, accounts that should have activity but show none, and balances that simply look wrong based on what you know about the business. This is where experience counts - a bookkeeper who knows the business will spot that the telephone bill is three times normal, or that the rent account is missing a month's charge. Compare key line items to the prior month and investigate anything that moves by more than 10-15% without an obvious explanation.
Prepare the VAT return (UK) or review sales tax (US)
If this is a VAT quarter-end (UK), prepare and reconcile the VAT return. Even if it's not a filing month, review the VAT control account to confirm that output VAT and input VAT have been correctly recorded on all transactions posted during the month. Look for common VAT errors: zero-rated supplies coded as exempt, reverse charge entries missing, or standard-rated expenses posted without VAT. For US businesses, review sales tax obligations - particularly if the business sells across state lines and has nexus in multiple jurisdictions. Catching VAT or sales tax errors monthly is infinitely easier than unravelling them at quarter-end or year-end.
Generate management reports
Produce the three core reports: Profit and Loss (income statement), Balance Sheet, and Cash Flow Statement. Review them not as an accountant but as a business owner would - do they tell a story that makes sense? Is revenue tracking where you'd expect? Are costs in line with prior months? Is the cash position healthy? If the business owner is expecting management accounts, now is when you prepare them. Add brief commentary on significant variances. The whole point of the month-end close is to produce these reports - they're the deliverable, not an afterthought.
Back up and lock the period
Once you're satisfied that everything is reconciled and the reports are correct, lock the period in your accounting software. This prevents anyone (including you) from accidentally posting transactions into a closed month, which would invalidate the reports you've just produced. If your software doesn't support period locking, note the date and time of your final review and make it a policy that no entries go into a closed period without your approval. Take a backup - cloud accounting makes this less critical than it once was, but having a snapshot of the books as at the close date is still good practice.
How long should month-end take?
This is the question every bookkeeper gets asked, and the honest answer is: it depends on the business, the state of the records, and how much of the work was done during the month versus saved up for the close.
If your month-end close routinely takes longer than these benchmarks, the issue is almost certainly upstream. Transactions aren't being coded during the month. Bank feeds aren't connected. Invoices aren't being entered promptly. The month-end close should be a review and reconciliation exercise, not a data entry marathon. If you're spending most of your time categorising transactions rather than checking them, the process needs restructuring.
The Practice Problem
For bookkeeping practices managing dozens of clients, month-end close is not a single event - it's a rolling process that occupies the first week or two of every month. The maths is unforgiving: 25 clients at 4 hours each is 100 hours of close work, every month, before you do anything else. This is the context in which automation stops being a nice-to-have and becomes a survival mechanism.
Common month-end close mistakes
Most month-end errors aren't spectacular failures. They're quiet oversights that accumulate until they become somebody's problem at year-end. Here are the ones we see most often.
Skipping bank reconciliation
"I'll catch up next month." You won't. Or rather, you will, but you'll be reconciling two months at once, which takes more than twice as long because you've lost the context. A transaction that looked odd but explicable last month is now a complete mystery. Unreconciled months stack. Three months of unreconciled bank accounts is no longer a month-end close - it's a project.
Forgetting accruals for annual charges
Insurance, software subscriptions, domain renewals, professional memberships - these are expenses that hit once a year but relate to twelve months. If you only recognise them in the month the payment goes out, eleven months of your P&L are understated and one month is dramatically overstated. Set up a schedule at the start of the year for every known annual charge and release one-twelfth each month. The effort is minimal; the impact on reporting accuracy is significant.
Not reviewing the suspense account
Suspense accounts are temporary by definition. In practice, they become permanent dumping grounds for anything the bookkeeper didn't have time to investigate. A non-zero suspense balance at month-end means your P&L and balance sheet are both wrong by that amount, you just don't know in which direction. Check it. Clear it. Every month.
Closing without checking outstanding items
Locking the period doesn't mean the period is correct - it means you've decided it's correct. Before you lock, check: are there unmatched bank transactions? Unallocated customer payments? Bills entered but not yet approved? Draft invoices that should have been finalised? Every open item is a potential error in your reports. Clear them first.
Not communicating with the business owner
The month-end close sometimes surfaces questions only the business owner can answer. What was that £3,500 payment to a new supplier? Is this customer debt actually recoverable? Did the business take out a new loan? Sitting on these questions until year-end creates a backlog of uncertainty. Ask promptly, while the transactions are fresh in everyone's memory.
Speeding up the month-end close
The best month-end close is a boring one. No surprises, no mysteries, no late-night data entry. That only happens when most of the work is done before the month ends, not after.
Process throughout the month, not all at once
If transactions are coded and reconciled weekly (or even daily, if bank feeds allow), the month-end close becomes a review exercise rather than a processing exercise. You're checking that everything is correct, not entering it for the first time. This single change - from batch processing to continuous processing - typically cuts month-end close time by 40-60%.
Set up recurring journals
Depreciation, prepayment releases, accruals for known recurring expenses - these are identical every month. Set them up as recurring entries in your accounting software. They'll post automatically (or with one-click approval), removing a predictable chunk of manual work from every close.
Use bank rules and auto-categorisation
Most accounting platforms let you create rules that automatically categorise recurring transactions. The monthly rent payment, the phone bill, the broadband - these go to the same nominal code every time. Set up rules and let the software handle the repetitive coding. You still review and approve, but you're not manually selecting the same account code for the same direct debit twelve times a year.
Automate bank reconciliation
For businesses with hundreds or thousands of monthly transactions, manual reconciliation is the bottleneck. Automated matching - where software compares bank statement lines against book entries by date, amount, and description - can resolve 80-90% of transactions without human intervention. You focus on the exceptions rather than confirming every match manually.
Standardise your checklist
Use the same checklist, in the same order, every month. It sounds obvious, but the number of bookkeepers who approach month-end differently each time - starting with whatever seems most urgent rather than working methodically through the process - is surprisingly high. A consistent sequence means nothing gets skipped, and you build speed through repetition.
The two areas where automation makes the biggest difference are transaction coding and bank reconciliation. Coding hundreds of transactions manually - deciding which nominal account each bank entry belongs to - is time-consuming and error-prone, especially across multiple clients. Reconciling those coded transactions against the bank statement is the verification step that proves the coding was done correctly.
CodeIQ handles the transaction coding piece: it learns from your chart of accounts and historical patterns to classify transactions automatically, typically completing a full month's bookkeeping in around two minutes per client. ReconcileIQ handles bulk bank reconciliation, matching book entries against bank statements across all your clients' accounts. Together, they turn the most labour-intensive parts of month-end close into a review workflow rather than a manual entry process.
Printable checklist
The following summary is designed to be printed or saved. It covers all 15 steps in a format you can check off as you go.
Month-End Close Checklist
- Bank & Cash
- Download/import all bank statements for the full month
- Reconcile every bank account - closing balance matches
- Reconcile all credit card accounts
- Review and post petty cash transactions
- Receivables & Payables
- Review aged debtors - allocate receipts, chase overdue invoices
- Review aged creditors - confirm all supplier invoices entered
- Payroll & Journals
- Post and reconcile payroll journal (gross pay, employer costs, net pay)
- Release prepayments and post accruals for the month
- Post monthly depreciation journal
- Control Accounts
- Reconcile inter-company balances (if applicable)
- Clear suspense and clearing accounts to zero
- Review & Report
- Run trial balance - investigate anomalies and unexpected balances
- Review VAT position (UK) or sales tax obligations (US)
- Generate P&L, Balance Sheet, and Cash Flow reports
- Lock the period and take a backup
Client: __________________ Period: __________________ Completed by: __________________ Date: __________
Closing the books for 20+ clients each month?
CodeIQ automates transaction coding in about 2 minutes per client. ReconcileIQ handles bulk bank reconciliation across every account. Together, they turn month-end from a marathon into a review.
See how The IQ Suite helpsFrequently Asked Questions
What is the month-end close process?
The month-end close is a series of accounting tasks performed at the end of each month to finalise the financial records. It includes bank reconciliation, accounts receivable and payable reviews, payroll posting, VAT reconciliation, accruals, prepayments, and producing management reports.
How long should the month-end close take?
A well-organised bookkeeper should complete the month-end close within 3-5 working days. If it consistently takes longer, the process likely has bottlenecks that automation can address, particularly bank reconciliation and transaction coding.
What is the correct order for month-end tasks?
Start with bank reconciliation to establish the cash position. Then review accounts receivable, accounts payable, and payroll. Post accruals and prepayments next. Finally, reconcile VAT, review the trial balance, and produce management reports.
What are accruals and prepayments in month-end close?
Accruals are expenses incurred but not yet invoiced or paid (like utility bills). Prepayments are amounts paid in advance for future periods (like annual insurance). Both are adjusted monthly to ensure the profit and loss reflects the correct period's costs.