Accounting Monthly Closing Checklist
1. Bank Reconciliation
Examine and reconcile bank statements
Confirm outstanding checks and deposits
2. Journal Entries
Record necessary adjustments for accruals and deferrals
Update depreciation for fixed assets
Adjust prepaid expenses and unearned revenue
3. Accounts Receivable
Reconcile accounts receivable balances
Verify the allowance for doubtful accounts
4. Accounts Payable
Reconcile accounts payable balances
Ensure the accuracy of recorded expenses
5. Payroll
Review payroll transactions for correctness
Verify tax withholdings and other deductions
6. Fixed Assets
Update the fixed asset register
Record any disposals or additions to fixed assets
7. Inventory
Compare physical inventory with recorded amounts
Adjust inventory levels as necessary
8. Liabilities
Ensure all liabilities are accurately recorded
Reconcile outstanding loans or credit balances
9. Expense Review
Review all expenses for accuracy and proper classification
Confirm that all incurred expenses are documented
10. Revenue Recognition
Ensure proper recognition of revenue
Review deferred revenue and recognize it as appropriate
11. Financial Statements
Prepare financial statements: Income Statement, Balance Sheet, Cash Flow Statement
12. Analysis
Analyze financial statements for trends and discrepancies
Conduct variance analysis against budget or forecast
13. Closing Entries
Close temporary accounts (e.g., revenue, expenses) to retained earnings at year-end
14. Documentation
Ensure all supporting documents are filed correctly
Maintain a clear audit trail for all transactions
15. Backup and Security
Backup financial data and store it securely
Review access controls and restrict access as necessary
16. Final Review
Conduct a comprehensive review of the entire closing process
Verify that all required steps have been completed correctly
17. Reporting
Distribute financial reports to all relevant stakeholders
Respond to any questions or concerns raised
18. Compliance
Ensure adherence to accounting standards and regulations
Record any modifications in accounting policies or practices
19. Future Planning
Identify opportunities for process enhancement
Strategize for the upcoming months and anticipate potential challenges
20. Audit Preparation
Organize records and schedules in anticipation of external audits
Address any auditor requests or preliminary issues
