Month-end close checklist for bookkeepers
By Arthur Teboul, DokuTrak · Published
In brief
A month end close checklist lists every step a bookkeeper takes to close a client’s books for the month, from collecting statements and reconciling accounts to reviewing reports and locking the period. Put each client document next to the step that waits on it, so the request goes out on the first day of the close.
The checklist: Month-end close checklist
Send the first group to the client on the first day of the close. Work the other groups in order and tick each line when its document or check is done.
- PDFPrint it or tick it off on screen.Free, no email
- WordEdit it and send it under your name.Free, with your email
- Excel trackerOne row per item, with a status column.Free, with your email
Request from the client on day one
- Bank statements for every business accountChecking, savings and money market, full month, PDF from the bank.
- Credit card statements for every business cardStatement covering the month, including employee cards.
- Loan and line of credit statementsShowing the ending balance and the principal and interest split.
- Mortgage statement for any business propertyMonthly statement with principal, interest and escrow.
- Card processor and online store payout reportsGross sales, fees, refunds and payouts for the month.
- Investment or brokerage account statementsOnly if the business holds cash or securities there.
- Payroll register and pay stubsEvery pay date in the month, from the payroll provider.
- New contracts, leases or loan agreementsAnything signed this month that changes what the business owes.
Reconcile
- Reconcile each bank account to its statementList outstanding checks and deposits in transit.
- Reconcile each credit card to its statement closing balance
- Match loan balances to the lender statementBook the interest part of each payment as expense.
- Clear the processor clearing accountGross sales less fees and refunds should equal payouts.
- Match transfers between the client’s own accounts
Code what is still uncategorized
- Send the client the list of unclear transactionsDate, amount and payee for each line, with one question each.
- Collect receipts for card charges and cash spending
- Collect vendor invoices for bills paid this month
- Flag personal charges and book them to owner draws
Receivables, payables and payroll
- Review the accounts receivable agingFollow up on old balances and check for payments not applied.
- Check that customer invoices match recorded sales
- Review the accounts payable agingEnter bills received but not yet recorded.
- Tie payroll expense and liabilities to the payroll registerGross pay, employer taxes, withholdings and net pay.
- Update contractor payment totals for Form 1099-NECCheck that a Form W-9 is on file for each contractor and note its entity type: corporations are generally exempt, except attorneys.
Taxes, accruals, assets and equity
- Compare sales tax payable to tax charged on salesFiling schedule and rates depend on the client’s state.
- Record accrued expenses and deferred revenueAccrual basis only.
- Move this month’s share of prepaid expenses to expenseAccrual basis only.
- Apply the client’s capitalization policy to large purchasesExpense items under the de minimis safe harbor if elected; capitalize the rest.
- Record fixed asset additions and depreciationFrom the purchase invoice: date, price and description.
- Book owner draws and contributions to equity
Review, lock and report
- Compare the profit and loss to the prior month and prior yearExplain every line that moved more than the firm’s variance threshold.
- Check that every balance sheet account has supportA statement, schedule or reconciliation for each balance.
- Lock the period or set the closing date in the software
- Save statements, reconciliations and reports to the month folder
- Send the client the reports and the open questions
- Preparer and reviewer initials and dates on the close
Which client documents each step waits on
A close stalls when the client’s papers trickle in. The fix is to ask for everything at once, on the first day, and to know which step each document unblocks.
IRS Publication 583 names the paper a business keeps for its books, such as sales slips, paid bills, invoices, receipts, deposit slips and canceled checks (IRS Publication 583, Starting a Business and Keeping Records). Those same papers are what a month-end close runs on.
| Step | What you ask the client for | Why the step waits |
|---|---|---|
| Bank reconciliation | The statement for every checking, savings and money market account | You cannot match the ending balance without the bank’s own figure. |
| Credit card reconciliation | The statement for every business card, including cards held by employees | Card charges often post without a receipt or a memo. |
| Loan balances | Loan and line of credit statements showing principal and interest | The payment in the bank feed mixes principal and interest. |
| Sales and payouts | Payout reports from the card processor or online store | Deposits arrive net of fees and refunds, not as gross sales. |
| Uncategorized transactions | Receipts, vendor invoices and a short note on each unclear transfer | Only the client knows what a transfer or a cash withdrawal was for. |
| Fixed assets | The invoice for any equipment, vehicle or software bought this month | You need the date, the price and what the asset is. |
Reconcile every account, not only checking
IRS Publication 583 tells a business to check that the bank statement, the checkbook and the books agree, and to reconcile the checking account each month (IRS Publication 583, Starting a Business and Keeping Records). A clean close applies that rule to every balance sheet account that has an outside statement.
A bank reconciliation is the match between the balance on the bank statement and the balance in the books, with each difference explained. Differences are usually timing items, such as a check not yet cashed or a deposit in transit.
Start from the statement, not the bank feed. A feed can drop or repeat a transaction, while the statement is the bank’s own record. If you need a layout, the bank reconciliation template lists the lines to fill in.
- Reconcile each bank account to the ending balance on its statement.
- Reconcile each credit card to its statement closing balance, not to the payment date.
- Match loan balances to the lender’s statement and book the interest part of each payment as expense.
- Clear the processor clearing account: gross sales, less fees and refunds, should equal the payouts.
- Match transfers between the client’s own accounts so none shows up as income or expense.
Tie out payroll and track contractor payments
A payroll tie-out means checking that wages, payroll taxes and withholdings in the books agree with the payroll register for the same dates. Compare the register’s gross pay to wage expense, then compare the tax liabilities to the payments that left the bank.
Payroll taxes are reported each quarter on Form 941, and the return is due by the last day of the month after the quarter ends (IRS, Instructions for Form 941). Closing the last month of a quarter is the moment to make sure the quarter’s totals are right before that return is filed.
Contractors need their own check. For payments made in tax years beginning after 2025, Form 1099-NEC reports nonemployee compensation of $2,000 or more (IRS, Instructions for Forms 1099-MISC and 1099-NEC). The form is due to the IRS and to the contractor by January 31 (IRS, Instructions for Forms 1099-MISC and 1099-NEC). Tracking contractor totals each month saves a scramble in January.
| Quarter | Months | Form 941 due |
|---|---|---|
| First | January to March | April 30 (IRS, Instructions for Form 941) |
| Second | April to June | July 31 (IRS, Instructions for Form 941) |
| Third | July to September | October 31 (IRS, Instructions for Form 941) |
| Fourth | October to December | January 31 (IRS, Instructions for Form 941) |
Sales tax, accruals and prepaid expenses
Sales tax rules are set by each state, and often by cities and counties too. Your client’s state sets what is taxable and how often the return is due, so check the state revenue department’s site for the filing schedule. At month end, compare the sales tax payable account to the tax charged on sales for the period.
If the client keeps its books on the cash basis, you can skip accruals. On the accrual basis, the books should show what was earned and owed in the month, whether or not cash moved.
An accrued expense is a cost the business has incurred but not yet paid, such as wages earned in the last days of the month.
A prepaid expense is a cost paid in advance, such as a yearly insurance policy, spread over the months it covers.
- Record accrued expenses for bills that belong to this month but have not arrived.
- Move this month’s share of each prepaid expense to expense.
- Record deferred revenue when a customer paid for work not yet done.
Fixed assets and the owner’s money
IRS Publication 583 says a business must keep records that show when and how it acquired each asset and its purchase price (IRS Publication 583, Starting a Business and Keeping Records). So when a large purchase lands in the bank feed, ask for the invoice instead of booking it as a supply.
The client’s capitalization policy sets which purchases are assets. If the client has elected the de minimis safe harbor, items up to $2,500 per invoice or item, or $5,000 with an applicable financial statement, can be expensed (IRS, Tangible Property Final Regulations). The election is made each year with the tax return, so ask the preparer whether it was made.
Owner draws are money the owner takes out of the business for personal use. They reduce equity rather than count as expense, and money the owner puts in is a contribution to equity, not income.
Personal charges on a business card follow the same rule. Ask the client to flag them, then book them to draws or to a balance the owner owes back.
Review the reports, lock the period, send the summary
Read the profit and loss statement next to last month and the same month last year. A line that jumps or drops to zero is usually a miscoded transaction, not a real change.
On the balance sheet, every account should have support: a statement, a schedule or a reconciliation. Then set the closing date in the accounting software so no one edits the month by accident.
Keep the statements and reconciliation reports with the month’s files. The IRS says to keep most records for at least 3 years, and employment tax records for at least 4 years after the tax is due or paid, whichever is later (IRS, How long should I keep records?). A missing bank statement tracker shows which months still lack a statement.
- Compare the profit and loss to the prior month and the prior year.
- Check that each balance sheet account has a statement or schedule behind it.
- Set the closing date or lock the period in the software.
- Save the statements, reconciliations and reports to the client’s month folder.
- Send the client the reports with a short list of open questions.
Questions people ask
What should a month-end close include?
A month-end close should include collecting statements, reconciling every bank, card and loan account, coding uncategorized transactions, and checking payroll and sales tax. It ends with a review of the reports, a locked period and a summary for the client.
What is the difference between a cash and an accrual month-end close?
On the cash basis, you record income and expenses when money moves, so the close has no accruals. On the accrual basis, you also record what was earned and owed in the month, plus prepaid expenses and deferred revenue.
What do I do if the client never sends a bank statement?
Do not close the account on the bank feed alone. Ask the client to download the statement from online banking, mark the account as open in your notes, and finish the rest of the close while you wait.
How long should a small business keep month-end records?
The IRS says to keep most records for at least 3 years, and employment tax records for at least 4 years after the tax is due or paid (IRS, How long should I keep records?). Some cases, such as unreported income, call for longer.
Sources
- IRS Publication 583, Starting a Business and Keeping Records: Lists the supporting documents a business keeps, says to reconcile the checking account each month, and says asset records must show when and how an asset was acquired and its price.
- IRS, How long should I keep records?: Keep records for 3 years in most cases, and employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later.
- IRS, Instructions for Form 941: Form 941 is due by the last day of the month after the quarter ends: April 30, July 31, October 31 and January 31.
- IRS, Instructions for Forms 1099-MISC and 1099-NEC: For tax years beginning after 2025, nonemployee compensation of $2,000 or more is reported on Form 1099-NEC, filed and furnished by January 31; payments to corporations are generally not reported, except attorneys’ fees and medical payments.
- IRS, Tangible Property Final Regulations: Under the de minimis safe harbor election, a taxpayer may deduct tangible property up to $2,500 per invoice or item, or $5,000 with an applicable financial statement.
About the author
Arthur Teboul (Founder, DokuTrak) is building DokuTrak after watching professionals lose hours chasing clients for documents over email. Arthur Teboul.
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How this page was made (methodology): it is built from the primary sources listed under Sources, and every rule and figure on it links to the source it comes from. Last updated October 25, 2026. Spotted an error or a rule that changed? Contact us.
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