A monthly close is a repeatable routine to finish the month's books: record everything, reconcile accounts, review balances, make adjustments, run reports and lock the period.
1What a close is
A close means the month is finished: every transaction is recorded, every account reconciled and reports are final. Doing it on a fixed schedule gives you reliable numbers every month.
2Step 1: Record everything
Make sure all transactions are in the system, including cash, card, checks and online payments. Check payment platforms such as Stripe or PayPal too.
3Step 2: Reconcile accounts
Reconcile bank, credit card and loan accounts to the statements. The difference must be zero.
Do not use adjustments to force a balance. Find the cause.
4Step 3: Review customer and vendor balances
Check unpaid invoices and bills. Follow up on old items and remove errors.
5Step 4: Make adjustments
Record items such as depreciation, prepaid expenses or deposits as needed. Your CPA can advise on these.
6Step 5: Run reports
Produce the profit and loss, balance sheet and any custom reports such as profit by job or property.
7Step 6: Review and lock
Read the reports for anything unusual. Once reviewed, close the period in your software so past months cannot be changed by accident.
8Make it routine
Pick a date, such as the 10th, and follow the same steps every month. Our monthly plans close the books by the 10th.
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