Monthly Financial Close Checklist for Small Businesses
The 'monthly close' is the process of finalizing books for a month so the P&L and balance sheet can be trusted. Every serious accounting operation runs a close. Here's the version that works for Montana small businesses.
Timing
Close is done between the 5th and 15th of the following month. Waiting for the last late credit-card statement is normal; waiting 60 days is not.
Reports are delivered to the owner by the 15th.
The checklist
1. Import and categorize all bank feed transactions through month-end.
2. Reconcile every bank account, credit card, and loan to statements.
3. Record depreciation for the month.
4. Record accrued expenses and prepaid amortization (if on accrual).
5. Book payroll journal entries and tie to payroll provider reports.
6. Adjust inventory to actual (if applicable).
7. Review the P&L for anomalies vs prior month.
8. Review the balance sheet — every account should tie to something real.
9. Close the period in the accounting software to prevent back-dated changes.
10. Deliver P&L, balance sheet, and cash flow statement to the owner.
The balance sheet review
Skipping the balance sheet is the #1 mistake in small-business bookkeeping. Every asset and liability should tie to a real number: bank balances to statements, A/R to open invoices, loans to lender statements, payroll liabilities to what you actually owe.
A P&L that looks great with a broken balance sheet is not a real close.
Lock the period
After close, set a closing date in QuickBooks or Xero. This prevents anyone (including you) from accidentally back-dating a transaction into a closed month. Any adjustment to a closed month should be a deliberate journal entry, not a re-classification of an existing transaction.
A quick disclaimer
This article is general information for Montana small business owners, not tax, legal, or accounting advice for your specific situation. Rules change, and how they apply depends on facts we don't know about you. Before acting on anything you read here, talk to a qualified professional. If you're a Montana business owner and want a real conversation about your books, payroll, or tax, that's what Marlow Accounting is here for — call 406-290-1214 or schedule a discovery call.