A close is a process with a calendar and named owners, or it is a scramble.
The month-end close turns raw transactions into financial statements people can rely on. A fast, accurate close gives leadership timely numbers and takes the surprises out of year end.
The calendar
Publish a close calendar with a task owner and a due date against each line. It usually runs five to ten business days depending on company size. The critical path goes through cash reconciliation, revenue cutoffs and accruals.
A short daily standup during close week surfaces blockers while there is still time. Escalate a missing approval on the day, rather than at the reporting deadline.
- T+1: bank and subledger reconciliations complete
- T+3: accruals, prepaids and depreciation posted
- T+5: draft statements and variance analysis
- T+7: management review, then lock the period
Cutoffs and accruals
Cutoffs put each transaction in the right period. Write down the policy for shipping terms, milestone acceptance and service delivery, so it is not decided fresh each month.
Accruals capture revenue earned and costs incurred that have yet to be invoiced or paid. Reverse them in the following period to keep balances clean.
Reconcile and review
Reconcile every material balance sheet account each month, cash included. Give each unexplained item an owner and a plan to clear it.
Compare the results to budget and to prior periods. The variances are what leadership will ask about, so have the explanation ready.
Getting faster
Track how long the close takes and how many adjustments land after it. Automate the repeating journals and standardize the templates.
Turn each recurring problem into a fix: better source data, a clearer policy, or getting another team to send their numbers earlier.
Written by the team at Ambivo, a business platform that keeps CRM, accounting and ERP on one customer record. This article is general guidance on the topic rather than a description of Ambivo features.