A month-end close checklist for small finance teams

Set up the close before month end

A good close starts before the last day of the month. The aim is simple: by a fixed date, the month's numbers are complete, checked and locked, so nobody has to ask whether they are final.

Do this once, then reuse it every month:

• Write a close calendar. List every task, who owns it and the working day it is due. For example: bank reconciliations by working day 2, adjustments by day 3, review by day 4, reports by day 5. Pick dates that fit your team.
• Set cut-off rules. Agree that anything dated in the month belongs to the month, whenever it is entered. Goods that arrive on the 31st are October stock, even if the paperwork arrives in November.
• Send reminders. A few days before month end, remind staff to submit expense claims, approve open purchase requests and hand in delivery notes.
• Know your deadlines. Tax returns, statutory contributions and filings have their own dates. They vary by country, so check your local rules and put them in the calendar.

Step 1: Record everything for the month

Before you adjust or check anything, make sure the month's transactions are in.

• All sales invoices and credit notes for goods delivered or services performed in the month
• All supplier bills received for the month
• Goods received but not yet billed by the supplier (more on this in step 3)
• Approved expense claims
• Payroll for the month, including employer contributions
• Petty cash and card spending, with receipts
• Customer receipts and supplier payments, matched to their invoices and bills

A useful check: compare the number of sales invoices with the number of deliveries. If you shipped 140 orders and raised 136 invoices, find the four before you go further.

Step 2: Reconcile bank and cash

Bank reconciliation proves that your books and your bank agree, and it often finds missing entries from step 1. Do it for every bank account, including foreign-currency accounts and card accounts.

Say your bank statement shows SGD 48,200 at 31 October and your books show SGD 49,640.

The two adjusted balances agree. The SGD 40 of bank charges is a real entry you now post in your books. The deposit and payment are timing differences that will clear next month.

Also count any cash on hand and agree it to the petty cash account. For a fuller walk-through, see our guide to bank reconciliation.

Step 3: Post period-end adjustments

These entries record things that happened in the month but that no invoice or payment has captured yet. Most follow the same pattern every month, so keep a list.

Accruals

An accrual records an expense you have incurred but not yet been billed for. Say your Jakarta office used electricity in October, and the bill for IDR 3,500,000 will arrive in November. On 31 October you post:

• Debit utilities expense IDR 3,500,000
• Credit accrued expenses IDR 3,500,000

On 1 November you reverse it, so that when the real bill is posted the expense is not counted twice. The same logic applies to goods received not invoiced: if stock arrived in October but the supplier's bill has not, accrue for it.

Prepayments

A prepayment is the opposite: you paid in advance for something you will use over several months. Say you paid SGD 12,000 on 1 January for a year of insurance. The payment goes to a prepaid insurance asset. Each month you move one twelfth to expense:

• Debit insurance expense SGD 1,000
• Credit prepaid insurance SGD 1,000

By 31 December the prepaid balance is zero. Keep a schedule of every prepayment so you can see the remaining balance for each.

Depreciation

Spread the cost of fixed assets over their useful life. Say a delivery van cost MYR 90,000, with a five-year life and no residual value, depreciated on a straight-line basis. That is MYR 90,000 ÷ 60 months = MYR 1,500 a month:

• Debit depreciation expense MYR 1,500
• Credit accumulated depreciation MYR 1,500

Your accounting policy sets the book depreciation. Tax depreciation rules are separate and vary by country.

Foreign-currency revaluation

If you hold receivables, payables or bank balances in a foreign currency, restate them at the month-end rate. Say you invoiced a customer USD 10,000 when 1 USD = 1.35 SGD, so the receivable is carried at SGD 13,500. At month end the rate is 1.32, so the same USD 10,000 is worth SGD 13,200. You record an unrealised exchange loss of SGD 300.

Revalue monetary items only, such as receivables, payables and cash. Stock and fixed assets stay at their historical rate. A common practice is to reverse the revaluation on the first day of the next month, so the actual gain or loss is recorded when the customer pays. Check with your accountant how your local standards and tax rules treat unrealised differences. Our guide to multi-currency accounting explains the mechanics in more detail.

Other regular entries

• Deferred income for customer payments received before you deliver
• Recurring entries such as rent, loan interest or management fees
• Corrections and reclassifications found during review

Step 4: Check the sub-ledgers and stock

Your balance sheet control accounts should agree with the detail behind them.

• Receivables. The aged receivables report total equals the receivables account in the trial balance. Review anything over 60 or 90 days and decide whether it needs follow-up or a provision.
• Payables. The aged payables report total equals the payables account. Look for duplicate bills and bills on hold. If you match bills to purchase orders and goods receipts, clear the exceptions now; see our guide to three-way matching.
• Stock. The stock valuation report equals the inventory account. If you counted stock, post the adjustment and investigate large differences.
• Tax. The output and input tax accounts agree with what you will report on your GST, SST or VAT return. Rules and return periods vary by country, so check yours.
• Payroll liabilities. Amounts owed for salaries, tax withheld and statutory contributions agree with the payroll reports.
• Intercompany. If you run more than one company, balances between them agree on both sides. See our guide to multi-company accounting.

Step 5: Review, lock and report

Review. Run the trial balance and check that debits equal credits. Then compare this month's profit and loss with last month and the same month last year. Ask about anything that moved a lot. Say office expenses were MYR 4,000 last month and MYR 11,000 this month: find out why before anyone else asks.

Lock. Once you are happy, close the period in your system so nothing dated in it can be posted, changed or deleted. If a correction is needed later, reopen deliberately, record why, and close again. A locked period is what makes "final" mean final.

Report. Produce the profit and loss, balance sheet and cash flow statement. Add a short note for owners: what changed, why, and anything they need to decide. Three bullet points read better than three pages.

To see how one system can carry these steps from ledger to report, look at the accounting module and financial reports.

The checklist on one page

The days are an example. Set your own, then measure each month against them.

Where Nyra fits

In Nyra, invoices, credit memos, goods receipts and payroll runs post their own journal entries, so step 1 is mostly checking rather than typing. Bank reconciliation imports CSV or XLSX statements, matches lines automatically by amount and date (any match can be undone), and lets you post a missing entry such as bank charges from the same screen. Recurring journals are generated for review and post when approved. Prepayment amortisation, depreciation and FX revaluation each run per period, and FX revaluation reverses itself in the next period. Posting periods can be closed by account type, recording who closed or reopened them. The trial balance, P&L, balance sheet, cash flow and ageing reports read from the same ledger. Book a demo to see a close run end to end.