Monthly Closing Checklist

1. Bank Reconciliation:

- Review and reconcile bank statements.

- Verify outstanding checks and deposits.


2. Journal Entries:

- Record adjusting entries for accruals and deferrals.

- Update depreciation for fixed assets.

- Adjust prepaid expenses and unearned revenue.


3. Accounts Receivable:

- Reconcile accounts receivable.

- Verify the allowance for doubtful accounts.


4. Accounts Payable:

- Reconcile accounts payable.

- Confirm the accuracy of recorded expenses.


5. Payroll:

- Review payroll transactions for accuracy.

- Confirm tax withholdings and other deductions.


6. Fixed Assets:

- Update fixed asset registers.

- Record disposals or additions to fixed assets.


7. Inventory:

- Verify physical inventory against recorded amounts.

- Adjust inventory levels as needed.


8. Liabilities:

- Confirm all liabilities are recorded.

- Reconcile outstanding loans or credit balances.


9. Expense Review:

- Review all expenses for accuracy and proper classification.

- Confirm that all incurred expenses are recorded.


10. Revenue Recognition:

- Confirm proper recognition of revenue.

- Review deferred revenue and recognize as appropriate.


11. Financial Statements:

- Generate financial statements (Income Statement, Balance Sheet, Cash Flow Statement).


12. Analysis:

- Analyze financial statements for trends and anomalies.

- Conduct variance analysis against budget/forecast.


13. Closing Entries:

- Close temporary accounts (e.g., revenue, expenses) to retained earnings.


14. Documentation:

- Ensure all supporting documentation is filed appropriately.

- Maintain a clear audit trail for all transactions.


15. Backup and Security:

- Backup financial data and store it securely.

- Review access controls and restrict as necessary.


16. Final Review:

- Perform a final review of the entire closing process.

- Confirm all necessary steps have been completed accurately.


17. Reporting:

- Share financial reports with relevant stakeholders.

- Address any queries or concerns.


18. Compliance:

- Ensure compliance with accounting standards and regulations.

- Document any changes in accounting policies or practices.


19. Future Planning:

- Identify areas for process improvement.

- Plan for upcoming months and potential challenges.


20. Audit Preparation:

- Prepare for internal or external audits.

- Document any issues or areas of concern for follow-up.