Month End Checklist Template: Benefits & Tips

Working in finance and accounting means that you’re all too familiar with the month end close process. Chances are– if your business is handling the process manually, your team feels frustration every time they have to work through their month end checklist. 

Want to know a foolproof way to design a month end checklist template that can execute itself? Finance automation software is the key. We’re going to share all there is to know about month end close processes and best practices, including the type of technology that can help to make it a breeze. 

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What is Month End Close?

The month end close is an accounting process that entails collecting, reconciling, reviewing, and finalizing all transactions that took place during the month. 

The goal is to ensure that all documentation is accurate and in alignment so that internal documents and financial statements are reliable and correct. 

Regardless if you’re working in a business that deals with a small amount of transactions or a large volume of transactions, the month end close process is critical to detect fraud, ensure accurate financial statements, and make informed business decisions. 

How to Streamline the Month End Close Process?

The month end close process can be streamlined by having a clear and standardized process to follow. 

Consider the following to be a month end checklist template worth your while to implement (especially with the addition of automation technology to seamlessly execute the steps): 

1. Collect the Documentation 

To get started, you’ll have to have all your documentation ready to go. This includes credit card and bank statements, internal documentation, and receipts, for example. 

If you’re not already using accounting technology that can centralize and store this data, this step will end up taking more time than it should because you’ll have to scout for the necessary information across sources. 

• Import payroll 
• Accounts receivable 
• Expense reports and payments 
• Accounts payable 
• Credit card and debit card charges

2. Reconcile Accounts

With all data in hand, it’s time to compare, or reconcile, internal and external documentation to check for discrepancies or mistakes. 

Rather than having to manually sift through records and compare a long list of line items, you can utilize the best reconciliation software to automate this critical step. In turn, a step that could take hours or days ends up taking just seconds to complete. 

• Bank accounts 
• Prepaid expenses, fixed assets, etc. 
• Accounts payable 
• Charge accounts 
• Inventory 

3. Make Adjustments

Should you run into anything that is not matching up, investigate the reasoning. In some cases, it can be rightfully explained, such as timing delays in bank statement updates. 

In others, you may notice fraudulent charges or incorrect data entry. In these instances, it’s vital to update the records to properly reflect what is correct. Here’s more on how to adjust a journal entry. 

4. Review Reports

Compile and review reports that depict the month end’s financial position. With automation software, you can automate the reporting process. Additionally, you can make use of customizable dashboards that relay the information that each relevant party is most interested in receiving. 

With dashboards and reports, you can quickly recognize trends and patterns, enabling your business to be proactive rather than reactive if changes are needed. 

• P& L Variance report 

5. Close the Books

With everything in order, you can finally cross off the last to-do on the list, which is to close the books! Now, you’re ready to repeat the process at the end of next month. 

• Review your process from this month 
• Prepare for next month 

What is in the Month End Close Checklist?

Having a month end close checklist can help you to remain prepared and ensure that you don’t forget to cross-check any important documentation.

What are Month End Close Best Practices?

Interested in learning and applying some month end close best practices to optimize this repetitive and important process? 

Consider these recommendations: 

1. Prioritize Accuracy

Everyone wants to have more time to do more (or relax), so it’s understandable as to why you’d want to get this process over with. However, accuracy should always come before speed. This is because any mistake, even a small one, can end up being damaging in the long run or even more time-consuming to remediate.  

2. Make Use of Templates

Since the month end close process takes place monthly, it’s perfectly suited for a template and standardization. Having a workflow template set up means that you can maintain internal control and run the process the same way each time. By doing so, you can also look for ways to improve and refine the process while delivering consistent results. 

3. Leverage Technology

Finance automation software with reconciliation capabilities is one of the strongest recommendations we can make. Why? Because finance automation software will save time (85x faster processes), reduce errors by 90%, increase transparency, and boost efficiency. 

Rather than your team members spending valuable time on data collection and entry, they can allocate their efforts towards high-level and strategic responsibilities. 

What are the Benefits of Month End Close Process?

Upkeeping a consistent and accurate month end close process brings with it an array of benefits, including: 

1. Accurate Projections

With oversight of your business’ monthly transactions, it’s easier to make financial projections and prepare for the future using information from the past. 

2. Audit Readiness

Audits can happen any time, and they take a lot of time. But, if you have your monthly books properly recorded and resolved, you can be prepared any time. Additionally, with the use of finance automation software, all the data and information you need to run an audit is ready to go with detailed audit trails plus version history all built in. 

3. Better Decision Making

With finance automation and a reliable and accurate accounting system in place, business leaders have the facts and figures easily in hand to make more informed decisions in real-time. With automation staff have more time and capabilities to provide greater insights to the business. 

What are the Challenges of Month End Close?

Even if you have a month end checklist template that helps you to cover all bases, there are some common challenges that you may face, such as: 

1. Delays and Inefficiencies

When dealing with the month end close process manually, there will inevitably be inefficiencies that exist. From data collection through the reconciliation process, it becomes time-consuming and slower than it should be. Process inefficiencies are costly for businesses, so it’s worth it to overcome them with the addition of finance automation software that streamlines critical processes. 

2. Disconnected Data

Storing data across spreadsheets or multiple disconnected systems causes delays and mistakes. Rather, it’s best to opt for a single source of centralized truth, which can be accomplished by implementing finance automation software that connects with your existing tech stack. 

3. Human Error

Manual data entry can result in errors, no matter how meticulous your team members may be. Human errors can be in the form of duplicate data entries, uncategorized transactions, missing data, or delayed timing. 

4. Lack of Collaboration

Coordination is key when it comes to the month end close process, as information is needed from different people and different departments. It’s valuable to assign responsibility to one person or a team to ensure everything gets input and resolved on time. 

Additionally, with finance automation software, you can automatically connect data, centralize communication, and even choose from a library of templates to initiate the process. 

Wrap Up

The month end close process is a vital workflow for all businesses to execute with care and consistency. With a month end checklist template and automation software to run through the process, you can save time, reduce errors, and make more informed business decisions.