Most month-end close checklists start from a fiction: that your data is clean, your GL ties cleanly to your subledgers, your beginning balances match prior period ending balances, and your chart of accounts is well-structured.
Most finance teams are working in conditions that are nothing like that.
Here is a close checklist that starts from where most companies actually are — and includes the data quality checks that make the difference between a close that closes and one that just gets declared closed.
Before you close
The following items should be completed before you finalize any period entries.
1. Reconcile AR subledger to GL
Pull your AR aging report and your AR GL balance for the period. They should match. If they don't, find the difference before you close.
Common causes:
- Direct GL postings that bypassed the AR module
- Voided invoices that left GL entries without corresponding AR reversal
- Currency revaluation entries that landed in the wrong account
If the gap is more than your materiality threshold, do not close until it's resolved. Closing with a known reconciliation gap just makes the next period harder.
2. Reconcile AP subledger to GL
Same logic as AR. Pull your AP aging and your AP GL balance. Find the difference if there is one.
Additional AP-specific check: scan for invoices posted in two consecutive periods for the same vendor and similar amounts. This is the most common pattern for AP duplicates that affect the close.
3. Confirm accruals are posted
Go through your accrual schedule. For each item:
- Is the accrual posted?
- Is it posted to the correct account?
- Is the reversal scheduled for the correct date in the following period?
An accrual that reverses to the wrong account is worse than no accrual — it creates a clean-looking close that generates a mystery variance the following period.
4. Run a period continuity check
Your opening balance for this period should equal your closing balance from last period. For every account.
This sounds obvious. In practice, many companies have small differences that accumulated over multiple periods, often because:
- A period was reopened and a transaction was posted after preliminary close
- A reclassification entry was posted to the wrong period
- A prior-period adjustment was not reversed correctly
These should be resolved, not ignored. A continuity gap that goes unaddressed compounds over time.
During close
5. Post period-end journal entries in the correct sequence
If you have allocations, amortizations, or recurring entries, post them in the correct sequence. Allocations based on revenue should be posted after revenue is finalized. Amortizations based on balances should use the correct beginning balance.
Document the sequence in your close checklist. If someone new has to run the close in three months, they should be able to follow the checklist without asking questions.
6. Run a duplicate check before posting accruals
Before posting accruals, scan for open purchase orders, unapplied vendor credits, and vendor invoices with similar amounts posted in the last 30–60 days. This takes 15 minutes and catches a significant percentage of AP duplicates before they make it into a closed period.
7. Verify intercompany eliminations (if applicable)
If you have multiple entities, every intercompany transaction should have a matching counterpart in the other entity. Before closing, run a report of intercompany balances and confirm they net to zero.
Uneliminated intercompany balances are one of the most common sources of consolidated financial statement errors — and they are very difficult to find after the period is closed.
After preliminary close, before final close
8. Tie the trial balance to the prior period
Run a comparative trial balance: this period vs. last period. For every account with a significant variance, you should have an explanation. If you don't have an explanation, you don't have a close — you have a number.
This doesn't mean every variance needs to be small. Revenue grew. An expense spiked. A one-time charge hit. Those are fine if you know about them. The variance that should concern you is the one you can't explain.
9. Run the financial statements and review for reasonableness
Look at the P&L. Does revenue look right? Do margins look right given what you know about the business this month? Does the balance sheet look right — does cash match your bank reconciliation, does AR look right given what you billed and collected?
This is not an audit. It is a reasonableness check. It takes 20 minutes and it catches a surprising number of errors that passed every other check.
10. Lock the period
Once the close is complete, lock the period in your ERP immediately. Do not leave it open "just in case." If an adjustment needs to be made after the fact, post it in the current open period with clear documentation.
An unlocked closed period is an invitation for problems that are hard to trace.
The real close problem
Most close pain is not a process problem. It is a data problem.
If your AR doesn't tie to your GL, no process improvement fixes that. If you have duplicate vendors in your system, your AP analysis is wrong regardless of how carefully you follow the checklist.
The checklist above assumes your data is reasonably clean. If it's not — if you're reconciling the same differences month after month, if your subledgers never quite tie to your GL, if your chart of accounts has accumulated accounts that nobody uses and nobody knows what they're for — that's a data rehab problem, not a process problem.
The free data health score will tell you which category you're in. Submit your trial balance and GL detail, and we'll run the analysis and tell you specifically what's broken and what it would take to fix it.