month-end-close-checklist

Month-End Close Checklist

This skill builds a dependency-sequenced month-end (or period-end) close checklist tailored to a specific entity, and a tracker the team can re-run every period with owners, due days, and status. It is for controllers, financial accountants, and close managers who want a repeatable, auditable close that finishes on time with fewer post-close adjustments. The methodology reflects standard close discipline and accrual accounting under IFRS/IAS and US GAAP; it does not assume any proprietary firm tool.

When to use this

• A team is designing or documenting a month-end close for the first time, or standardizing an inconsistent one.
• The close runs late, surprises appear after sign-off, or tasks are done out of order (e.g. reconciliations before subledgers are closed).
• Onboarding a new entity, ERP, or controller and you need a clean close calendar with owners and due days.
• You want a tracker to run the close each period and evidence control operation for audit.
• A quarter-end, year-end, or audit-prep close needs a tighter, more rigorous version of the monthly checklist.

Inputs

Ask the user for whatever is available; proceed with sensible defaults if some are missing.

• Entity profile: legal entity name(s), functional/presentation currency, framework (IFRS, IFRS for SMEs, US GAAP), and whether the entity is part of a group (consolidation, intercompany).
• ERP / ledger system and key subledgers in use (AP, AR, fixed assets, inventory, payroll, revenue).
• Close target: business-day deadline (e.g. "WD+5"), and the period type (monthly, quarter, year-end).
• Team: list of people/roles available to own tasks; the reviewer/approver who signs off.
• Known complexities: foreign-currency balances, leases (IFRS 16), accrued revenue, multi-entity intercompany, deferred revenue, provisions.
• A prior task list if one exists (CSV or notes). A starter tracker is bundled at samples/close_tracker_sample.csv you can use as the schema and example.

How to do it

Sequence matters: each phase depends on the prior one being complete. Do not start reconciliations until the relevant subledgers are closed; do not revalue FX until all foreign-currency transactions are posted; do not review until cutoff and intercompany are settled.

1. Set the close calendar. Anchor everything to business days relative to period-end. Define WD0 (last calendar day) and assign each task a due business day (WD+1, WD+2, ...). A typical monthly close lands at WD+4 to WD+6. Mark dependencies explicitly so a slipped task flags its successors.

2. Pre-close / cut subledgers (WD-1 to WD+1). Stop transaction entry in source subledgers in a defined order: AP invoices and AR billing, expense claims, inventory movements, payroll. Confirm bank feeds are imported. Lock the prior period. Record the last document number per subledger so cutoff testing has a reference.

3. Accruals (WD+1 to WD+2). Recognize expenses incurred but not yet invoiced, matching cost to the period under the accrual basis (IAS 1 accrual concept; expense recognition under the matching principle). Cover goods/services received not invoiced (GRNI), accrued payroll and bonuses, utilities, professional fees, and interest. For each accrual capture the basis of estimate and supporting evidence. Provisions (uncertain timing/amount) follow IAS 37 (US GAAP: ASC 450) - recognize when a present obligation exists, outflow is probable, and amount is reliably estimable; otherwise disclose as contingent. Reverse prior-period accruals where the actual invoice has now posted to avoid double counting.

4. Prepayments / deferrals (WD+1 to WD+2). Identify costs paid in advance that benefit future periods (insurance, software licenses, rent) and amortize the current-period portion. Maintain a prepayment schedule with opening balance, additions, monthly release, and closing balance. Mirror the logic for deferred/unearned revenue (recognize only the portion earned this period; IFRS 15 / ASC 606). Confirm lease accounting entries where IFRS 16 applies: depreciation of the right-of-use asset and interest unwind on the lease liability.

5. Reconciliations (WD+2 to WD+3). Reconcile every balance sheet control account to an independent supporting source, only after subledgers are closed:

   • Bank: ledger cash to bank statement, listing reconciling items (in-transit deposits, uncleared payments) with expected clearing dates.
   • AP / AR: subledger aging totals to GL control accounts; investigate debit balances in AP and credit balances in AR.
   • Fixed assets: register to GL; confirm additions, disposals, and the depreciation charge.
   • Inventory: perpetual records to GL; reconcile any count or standard-cost variances.
   • Payroll, tax (VAT/GST, payroll taxes), and intercompany control accounts. Apply a reconciliation threshold policy: unreconciled differences above a defined materiality (e.g. a fixed monetary floor or a % of the account) must be explained and cleared before sign-off; aged items get a remediation owner and date.

6. Intercompany (WD+2 to WD+3). For group entities, agree intercompany balances and transactions with counterparties before consolidation. Match IC AR to IC AP per partner, reconcile in a common currency, and clear mismatches (timing, FX, disputed charges). Confirm IC loan interest and management charges are recorded both sides. Unreconciled IC differences are a leading cause of consolidation eliminations failing - resolve them at source, not in the elimination journal.

7. Cutoff (WD+2 to WD+3). Test that transactions are recorded in the correct period. Review the last and first few invoices/shipments/receipts around period-end against goods-received and delivery dates. Check revenue cutoff (control transfer under IFRS 15 / ASC 606), expense cutoff (GRNI), and that post-period-end documents are not booked into the closing period. Document the populations and document numbers tested.

8. FX revaluation (WD+3). Once all foreign-currency transactions are posted, revalue monetary assets and liabilities at the closing rate (IAS 21 / ASC 830). Recognize exchange differences in profit or loss for monetary items; do not revalue non-monetary items carried at historical cost. Use a consistent, documented rate source and rate date. For group reporting, translate the entity's results and position into the presentation currency (closing rate for the statement of financial position, average rate for the statement of profit or loss; differences to a translation reserve in OCI).

9. Journal posting and trial balance lock (WD+3 to WD+4). Post all close journals with descriptions and support; confirm each has a preparer and the reviewer is separate (segregation of duties). Run a draft trial balance, confirm debits equal credits, and check for unexpected balances (e.g. suspense/clearing accounts that should be nil).

10. Review and analytics (WD+4 to WD+5). Reviewer performs analytical review: actuals vs prior period and vs budget, with explanations for variances above a set threshold (commonly the greater of a monetary floor or ~5-10% of the line). Scan for missing recurring entries, unusual round numbers, and reversed-but-not-reposted items. Confirm balance sheet integrity (negative inventory, debit liabilities, stale prepayments).

11. Sign-off and reporting (WD+5 to WD+6). Reviewer formally approves; record date, approver, and any open items carried forward. Lock the period in the ERP. Produce the management reporting pack and archive the close file (reconciliations, journals, support) for audit. Hold a brief retrospective: which tasks slipped, root cause, and one improvement for next period.

Output

Produce two artifacts.

1. Close checklist (Markdown workpaper) organized by the phases above. For each phase, a short purpose line and the specific tasks tailored to the entity, with the standard reference where relevant (e.g. IAS 37 for provisions, IAS 21 for FX, IFRS 15/ASC 606 for revenue cutoff).

2. Close tracker (CSV) the team runs each period, with these columns:

   • task_id (stable identifier, e.g. ACC-01)
   • phase (Pre-close, Accruals, Prepayments, Reconciliations, Intercompany, Cutoff, FX, Posting, Review, Sign-off)
   • task (specific description)
   • owner (role or name)
   • due_wd (business day, e.g. WD+2)
   • depends_on (task_id(s) that must complete first)
   • status (Not started / In progress / Blocked / Done)
   • materiality_threshold (where a reconciliation/variance rule applies)
   • evidence_ref (link or filename of support)
   • notes

Match the column schema of the bundled samples/close_tracker_sample.csv so the team can drop it straight into a sheet.

Quality checks

• Dependencies are explicit and acyclic: no reconciliation scheduled before its subledger close; no FX revaluation before all FX postings; no review before cutoff and intercompany are clear.
• Every balance sheet account has a named owner and a reconciliation task - no orphan control accounts.
• Accrual reversals are scheduled so prior-period accruals do not double-count when the invoice arrives.
• Segregation of duties: the preparer of a journal or reconciliation is not its sole reviewer.
• FX: only monetary items revalued; non-monetary historical-cost items left untouched; rate source and date documented.
• Intercompany matched both sides before consolidation; residual differences explained, not buried in eliminations.
• Materiality/threshold rules are stated, not implicit, so "reconciled" is defined objectively.
• Common errors to avoid: starting reconciliations on open subledgers, revaluing non-monetary assets, posting post-period documents into the closing period, omitting recurring entries (depreciation, lease unwind, deferred revenue release), and leaving suspense/clearing accounts non-nil.

Worked example

Using samples/close_tracker_sample.csv for "Aurora Components Ltd" (GBP functional currency, IFRS, part of a small group with "Northwind Trading BV" in EUR):

• Pre-close (WD+1): AP and AR billing stopped; bank feed imported (task PRE-01).
• Accruals (WD+2): GRNI accrual for goods received in June not yet invoiced from Northwind; accrued June audit fees (ACC-01, ACC-02). Prior-month utilities accrual reversed (ACC-03).
• Prepayments (WD+2): annual software license released one-twelfth to June expense; IFRS 16 office lease depreciation and interest posted (PRE-02, PRE-03).
• Reconciliations (WD+3): bank rec shows a GBP 4,120 uncleared supplier payment expected to clear WD+1 of next month; AP aging ties to control account; threshold for unexplained differences set at GBP 500 (REC-01..REC-03).
• Intercompany (WD+3): Aurora's receivable from Northwind (EUR 38,000) matched to Northwind's payable; a EUR 1,200 timing difference traced to an in-transit charge and cleared (IC-01).
• Cutoff (WD+3): last five June sales invoices checked against dispatch dates; one invoice dated 30 June but shipped 2 July moved to July (CUT-01).
• FX (WD+4): EUR intercompany receivable and EUR bank balance revalued at 30 June closing rate; difference to FX gain/loss; fixed assets (non-monetary) left at historical cost (FX-01).
• Review and sign-off (WD+5): controller reviews actual vs budget, explains the >10% jump in professional fees (audit accrual), then approves and locks the period (REV-01, SGN-01).

Disclaimer

Disclaimer: This skill is a drafting and analysis aid, not professional advice. It does not provide accounting, audit, tax, investment, or legal advice. All output must be reviewed and approved by a qualified professional before use or reliance.

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