# The month-end close process, day by day

[Home](/) / [Checklists](/checklists) / [Month-end close](/checklists/month-end-close) / Month-end close process

By [Arthur Teboul](/authors/arthur-teboul), Founder, DokuTrak. Published 2026-10-27, updated 2026-10-27.

> **In brief:** The month end close process is the run of tasks a bookkeeper works through once a month ends: gather the client’s statements, record and reconcile, post adjustments, review, then lock the period. A calendar that gives each day an owner and an input document can keep a small-business close to about one working week.

## The checklist: Month-end close calendar

A five-business-day calendar for one client. Write the owner’s initials next to each line and tick it when the output exists; use the last group when statements arrive late.

### Before the month ends

- [ ] Send the client the document request for the closing month: Owner: bookkeeper. Due date: second business day of the new month.
- [ ] Bank statements for every account: Client sends the full-month PDF from the bank.
- [ ] Credit card statements for every card: Client sends the statement that closes in or just after the month.
- [ ] Payroll register or pay stubs for each pay date: From the payroll provider, if payroll runs outside the books.
- [ ] Late vendor bills and expense receipts: Client forwards anything not yet entered by the last day.

### Days one and two: record and reconcile

- [ ] Confirm every bank and card feed runs through the last day: Owner: bookkeeper. Import a statement file where a feed is broken.
- [ ] Record cash receipts and match deposits: Against customer invoices and processor payout reports.
- [ ] Post the payroll journal for every pay date: Gross wages, employer taxes, withholdings, net pay.
- [ ] Reconcile each bank account and save the report: Output: reconciliation report filed with the statement.
- [ ] Reconcile each card and each loan account: Card to its closing balance; loan to the lender statement, interest split out.

### Day three: receivables, payables and adjustments

- [ ] Apply unapplied customer payments and review the receivables aging: Flag balances past ninety days for the client.
- [ ] Enter late bills and tie the payables aging to the balance sheet: Check vendor credits and vendor statements.
- [ ] Post accruals and reverse last month’s: Accrual basis only; worksheet saved with the month.
- [ ] Post prepaid amortization and depreciation: From the prepaid schedule and fixed asset register.

### Days four and five: review, lock, report

- [ ] Review every balance sheet account against its support: Owner: reviewer.
- [ ] Compare the P&L with last month and question large swings: Owner: reviewer.
- [ ] Clear review notes and send open questions to the client: Owner: bookkeeper, in one list.
- [ ] Sign off and set the closing or lock date: Last day of the closed month.
- [ ] Send the report pack to the client: P&L, balance sheet, reconciliations, agings, open questions.

### If documents arrive late

- [ ] Log which document was late and how many days: One line per client per month in the bottleneck log.
- [ ] Move reconciliations to the days after the statements land: Typical stretch: reconcile days four to six, review day eight.
- [ ] Keep the period unlocked until the last account is reconciled
- [ ] Send next month’s request earlier for this client: Ask first for the document that was late.

Download: [PDF](https://dokutrak.com/downloads/pseo-v2/f5-checklists/month-end-close/process.pdf) · [Word](https://dokutrak.com/downloads/pseo-v2/f5-checklists/month-end-close/process.docx) · [Excel tracker](https://dokutrak.com/downloads/pseo-v2/f5-checklists/month-end-close/process.xlsx)

## What the close is, and what it is not

The **month-end close** is the routine that turns a month of raw bank activity into reports you can stand behind. It ends when every balance has proof and the period is locked against edits.

It is not the year-end close. In a double-entry system, income and expense accounts are closed at the end of each tax year, while asset, liability and net worth accounts stay open ([IRS Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583)). A monthly close checks and adjusts the books but leaves those yearly closing entries for the last month of the year.

A **closing entry** is the journal entry that zeroes out income and expense accounts into retained earnings. Software usually does this for you: QuickBooks Online, for example, moves last year’s net income to retained earnings when the new year starts ([QuickBooks Online Help, Close your books in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/close-books/close-books-quickbooks-online/L59LelyPM_US_en_US)).

## A five-day close calendar with an owner for each day

The calendar below assumes the client sends statements by the second business day. Each row names the person who owns the work, the document it starts from, and what it produces.

| When | Owner | Task | Starts from | Produces |
| --- | --- | --- | --- | --- |
| A few days before month-end | Bookkeeper | Send the client the document request with a deadline of the second business day | Last month’s open items list | One request per client |
| Last day of the month | Client | Enter or forward late vendor bills and expense reports | Bills and receipts on hand | Bills ready to post |
| Business day one | Bookkeeper | Confirm feeds run through month-end, record deposits, post payroll | Bank feeds, payout reports, payroll register | Complete transaction list |
| Business day two | Bookkeeper | Reconcile bank, card and loan accounts | Statements from the client | Saved reconciliation reports |
| Business day three | Bookkeeper | Work receivables and payables, post accruals, prepaids and depreciation | Agings, accrual worksheet, prepaid schedule | Adjusted trial balance |
| Business day four | Reviewer | Review the balance sheet and compare the P&L with last month | Adjusted trial balance and support | Review notes |
| Business day five | Reviewer and bookkeeper | Clear notes, sign off, lock the period, send reports | Cleared review notes | Locked month and client report pack |

## The steps in order

Order matters because each step feeds the next. Reconciling before every deposit is recorded means doing it twice, and reviewing before accruals are in means reviewing twice.

Bank work comes first because the IRS frames reconciling as making sure the bank statement, your checkbook and your books agree ([IRS Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583)). Everything after it rests on cash being right.

1. Request the month’s statements, payroll register and receipts from the client.
2. Record cash receipts and match each deposit to an invoice or a processor payout.
3. Post payroll from the register for every pay date in the month.
4. Reconcile every bank, card and loan account to the outside statement.
5. Close receivables and payables: apply stray payments, enter late bills, tie each aging to the ledger.
6. Post accruals, reversals, prepaid amortization and depreciation.
7. Review the balance sheet line by line, then the P&L against the prior month.
8. Sign off, lock the period and send the client the reports with open questions.

## Where receivables and payables fit

Receivables and payables sit after the bank work. Once deposits are matched, the receivables aging shows what is truly unpaid, and you can flag old balances for the client to chase or write off.

On the payables side, enter the bills the client forwarded late, then compare the payables aging total with the balance sheet. A **vendor statement** is the summary a supplier sends of what it billed and was paid, and it is the fastest way to catch a missing bill.

Whether these steps even apply depends on the client’s method. Under the cash method, income counts when it is actually or constructively received ([IRS Publication 538, Accounting Periods and Methods](https://www.irs.gov/publications/p538)). A cash-basis client still has bills to track, but no receivable or payable sits on its tax books.

## What slows the close down, and how to speed it up

For a small-business client, the usual delay is not the software. It is a statement, a receipt or a payroll report that has not arrived, and every later day on the calendar waits for it.

Keep a **bottleneck log**: a short note per client of which document arrived late each month. After two or three months it shows whose request needs to go out earlier, and which document to ask for first.

When statements arrive late anyway, stretch the calendar instead of closing on the bank feed. Push reconciliations back to the days after the statements land, move the review to the second week, and keep the period open until the last account is reconciled. The [missing bank statement tracker](/tools/missing-bank-statement-tracker) shows which months still lack a statement.

- Send the request before month-end, not after, with a firm due date.
- Ask for everything in one request instead of one email per document.
- Reconcile the accounts whose statements arrived while you wait on the rest.
- Carry open questions to the client in one list, not as they come up.

## Running the close for many clients at once

A firm closing dozens of clients cannot give each one the same five days. Stagger them by how much work the close takes, such as simple cash-basis service businesses first and clients with inventory, payroll and accruals last.

Give every client the same output pack so the review is quick to read: P&L, balance sheet, reconciliation reports, agings and the open questions list. The step-by-step task list for one client is in the [month-end close checklist](/checklists/month-end-close), and the adjusting entries are explained in month-end accruals.

## Questions people ask

### What is the month-end close process in accounting?

It is the routine of collecting statements, recording and reconciling the month’s transactions, posting adjusting entries, reviewing the reports and locking the period so the numbers stop changing.

### How long should a month-end close take?

For a small-business client with statements in hand, about five business days is a workable target. The real driver is how fast the client sends documents, so plan a longer calendar for clients who send late.

### What is the difference between the monthly close and the year-end close?

The monthly close checks and adjusts the books and locks the month. The year-end close adds the closing of income and expense accounts into retained earnings, plus year-end tasks such as tax forms and a full asset review.

### What are the closing entries at the end of the year?

On a manual ledger you close revenue to income summary, close expenses to income summary, close income summary to retained earnings, and close owner draws or dividends. Accounting software rolls net income into retained earnings for you.

**Not advice.** This page is general information, not tax, legal or HR advice. Rules change: check the cited source and ask your own professional before you rely on it. Last reviewed October 25, 2026.

## Sources

- [IRS Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583): In a double-entry system income and expense accounts are closed at the end of each tax year; reconciling means making sure the bank statement, checkbook and books agree.
- [IRS Publication 538, Accounting Periods and Methods](https://www.irs.gov/publications/p538): Under the cash method, income is included when actually or constructively received.
- [QuickBooks Online Help, Close your books in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/close-books/close-books-quickbooks-online/L59LelyPM_US_en_US): QuickBooks Online moves last year’s net income to the retained earnings account on the balance sheet.

## More on this topic

- [Month-end close checklist](/checklists/month-end-close)
- [Missing bank statement tracker](/tools/missing-bank-statement-tracker)

## About the author

Arthur Teboul (Founder, DokuTrak) is building DokuTrak after watching professionals lose hours chasing clients for documents over email. [Arthur Teboul](/authors/arthur-teboul).

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](/contact).

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