Why close at all
An unclosed month is a rumor; a closed month is a fact. Closing means every transaction is recorded, reconciled and locked - so when you read March's P&L in July, it still says what it said in April.
The 90-minute checklist
Reconcile (45 min)
- Bank accounts match the books to the cent
- All customer payments applied to their invoices
- Unallocated receipts investigated (advance? overpayment? mystery?)
- Supplier bills entered and matched to payments
- Tax collected reconciled against sales
Review (30 min)
- P&L: does the margin make sense vs. last month? Chase anything ±15%
- Balance sheet: receivables aging - who's newly overdue?
- Cash: lowest point next month, and the week it lands
- Customer credit balances: anything that should be applied or refunded?
Lock (15 min)
- Fix what review surfaced - this month, not 'sometime'
- Lock the accounting period
- File statements to your close folder
- Note one thing to automate before next close
The compounding payoff
Close #1 takes an afternoon. Close #6 takes an hour. Close #12 is boring - which is exactly what financial control feels like.