Finance and Bookkeeping - Session 06

The Monthly Close

Prepare a repeatable month-end review that checks completeness, reconciles balances, and records unresolved questions. Give the CEO a report with an explicit review status.

The MSP finance task

A month has ended, but a payroll record has not arrived and a supplier bill refers to that month's service. A close checks whether the records are complete before the team uses the reported profit to make decisions.

Close status

A monthly close checks completeness, period, balances, and adjustments. A completed calendar month or exported report does not establish approval.

Reporting cutoff

Use service and cost periods under the approved policy. Check bills received later, future-period prepayments, and payroll entries still awaiting synchronization.

Payroll evidence

Reconcile the payroll register and accounting mapping. The company export's payroll tax label does not establish an employer tax rate.

Bank and card reconciliation

Compare ledger accounts with statements. Explain outstanding items. Find a difference's cause before entering a correction.

Balance support

Receivables, payables, assets, debt, payroll, and tax balances need supporting schedules. The schedule should agree with the ledger and explain exceptions.

The review package

Record supported adjustments and regenerate reports. Show period, basis, status, evidence, and unresolved exceptions with named next actions.

The practice correction

$8,000 draft profit - $600 omitted September cost + $900 future-period expense removed = $8,300 corrected profit.

The company checklist

The admin manager prepares checks and evidence. The CEO reviews material exceptions and status. The accountant resolves policies and judgment questions.

A report is exported on October 6 for September. What establishes that September is closed?

  1. The calendar month has ended
  2. Required checks and review are completed
  3. October invoices have already been issued
  4. The exported file has a final-looking name

A $600 bill received in October concerns September usage and was omitted from an accrual draft. What should happen?

  1. Recognize the supported September cost
  2. Record revenue to offset the supplier bill
  3. Remove the bill because cash has not moved
  4. Assign the cost using only the email date

The bank feed has no items awaiting review. What additional check supports the cash balance?

  1. Increase the revenue forecast
  2. Rename the cash account
  3. Delete old outstanding payments
  4. Reconcile to the bank statement

Key terms

Monthly close
Completing and reviewing accounting records for a month.
Cutoff
Assigning financial activity to the correct reporting period.
Reconciliation
Comparing records that should agree and explaining their differences.
Outstanding payment
A recorded payment that has not cleared the bank at the statement date.

Three points to remember

  1. Close status follows evidence and review, not the calendar alone.
  2. Cutoff and reconciliations protect the meaning of monthly results.
  3. Unresolved exceptions need an owner and a visible next action.