📚 Monthly Close Best Practices: How to Build a Reliable Close Process
Every great business runs on numbers. But those numbers are only as valuable as they are accurate, timely, and trusted — and that’s exactly what a strong monthly close process delivers.
Yet for many growing companies, the monthly close is a source of stress, delays, and uncertainty. It stretches well past the 15-day mark. Adjustments continue weeks after the books are “closed.” Leadership questions whether the reports are even right. And finance teams feel stuck in a cycle of catch-up instead of clarity.
The truth is, a chaotic close doesn’t just create extra work — it undermines decision-making, erodes confidence, and can even lead to compliance issues. The good news? A clean, repeatable monthly close isn’t out of reach. It just requires discipline, structure, and the right processes.
In this guide, we’ll walk through how to build a monthly close process that’s accurate, efficient, and scalable — the kind of close that gives you reliable financials and real confidence in your numbers.
📊 Why the Monthly Close Matters More Than You Think
The monthly close is far more than a box-checking exercise. It’s the foundation for almost everything you do in finance:
📈 It ensures financial statements are accurate and complete, giving leadership a clear picture of performance.
🧭 It provides the data needed for budgeting, forecasting, and strategic decisions.
⚖️ It supports GAAP compliance, audit readiness, and investor reporting.
🏦 It builds trust — with leadership, lenders, and external stakeholders — that your numbers can be relied on.
Without a strong monthly close, everything else in finance is built on shaky ground.
📅 Step 1: Build a Close Calendar and Timeline
The first step to a better close is knowing exactly what needs to happen, when, and by whom.
Too many companies treat the close as a scramble. Tasks happen when someone remembers them. Deadlines shift. Reviews are rushed. The result? Inconsistency and errors.
Instead, treat your monthly close like a project with a clear timeline.
🗓️ What to Include in Your Close Calendar:
Day 0: Final day of the month — stop transactions and lock periods.
Days 1-3: Record accruals, review revenue cut-off, and reconcile cash.
Days 3-7: Complete balance sheet reconciliations, review journal entries, and book adjustments.
Days 7-10: Review preliminary financials and variance reports.
Days 10-12: Final review, approvals, and close of the books.
Day 13+: Deliver management reporting and KPI dashboards.
📌 Pro Tip: Assign each task to a specific owner. Accountability is key to a consistent close.
🧮 Step 2: Standardize Your Month-End Procedures
A reliable close process is repeatable. That means every month follows the same steps, checklists, and documentation standards.
Controllers often call this the “monthly close playbook.” It includes everything that needs to be done — and how.
🧾 Core Close Tasks to Standardize:
Bank and credit card reconciliations
Accounts receivable and accounts payable aging review
Fixed asset rollforward and depreciation
Accruals for expenses incurred but not invoiced
Deferred revenue recognition and revenue cut-off
Inventory reconciliations and cost of goods sold adjustments
Payroll reconciliations and benefits accruals
Intercompany transactions and eliminations
Balance sheet account reconciliations
Document each process step-by-step. Include screenshots, sample journal entries, and review procedures. This makes the close process less dependent on any one person — and reduces errors if team members change.
📌 Pro Tip: Use a shared close checklist (in Excel, Asana, or NetSuite) that updates in real time as tasks are completed.
🏗️ Step 3: Automate Where You Can
Manual work is the enemy of a fast, accurate close. It slows the process, increases error risk, and keeps your team focused on tasks instead of analysis.
Modern accounting systems and automation tools can dramatically speed up the close:
Bank feeds and reconciliations: Automatically pull transactions and match them to GL entries.
Revenue recognition schedules: Automate ASC 606 compliance instead of relying on spreadsheets.
Close checklists: Use workflow automation tools that notify team members of deadlines and approvals.
Intercompany eliminations: Automate recurring entries and consolidation adjustments.
📊 Example: A company that automated its revenue schedules and reconciliations reduced its month-end close from 15 business days to just 6 — freeing up time for analysis instead of manual work.
📑 Step 4: Review, Reconcile, and Validate
Accuracy is everything. A fast close that’s wrong is worse than a slow one. That’s why review and validation are essential.
Controllers should implement a three-layer review:
Account Reconciliations: Every balance sheet account must tie out to supporting documentation.
Variance Analysis: Compare actuals vs. budget, prior month, and prior year. Large or unexpected swings should always be explained.
Trend Review: Look for unusual patterns — sudden changes in margins, unexplained expense spikes, or revenue dips.
📌 Pro Tip: Build variance thresholds into your review. For example, flag any account with >10% change month-over-month for deeper analysis.
📊 Step 5: Close the Books — and Communicate Clearly
Once reconciliations are done, adjustments posted, and financials reviewed, close the period. Lock the books to prevent further changes and publish the final financial statements.
But your work doesn’t end there. One of the most overlooked parts of the monthly close is communication.
Deliver a monthly close memo summarizing key trends and issues.
Include dashboards and KPIs that leadership can use to make decisions.
Schedule a review meeting to walk through financial results and answer questions.
📌 Pro Tip: Timely reporting matters. A monthly close that finishes on day 30 isn’t much use for decisions on day 5. The most effective finance teams aim for a 10-day close.
🧭 Common Monthly Close Mistakes (and How to Avoid Them)
Even experienced teams run into roadblocks. Here are the most common mistakes — and how to fix them:
❌ Lack of a clear process: Without a checklist, things get missed.
❌ Poor cutoff procedures: Revenue or expenses end up in the wrong period.
❌ Overreliance on spreadsheets: Manual data handling leads to errors.
❌ Unreviewed accounts: Small errors snowball into big problems over time.
❌ No post-close review: Lessons aren’t captured, so mistakes repeat.
📌 Solution: Treat the close as a process that evolves. Review what worked and what didn’t after each close, and continuously improve.
✨ Final Thoughts
A strong monthly close process isn’t just about getting numbers right — it’s about building trust in your financial data. That trust is what enables faster decisions, better planning, and confident growth.
With the right calendar, standardized procedures, automation, and review structure, the monthly close stops being a chore and becomes one of your company’s greatest strategic tools.
📩 Acrux Advisory helps companies design and implement reliable monthly close processes that scale with growth. From building checklists to implementing automation and variance analysis, we help you move from reactive accounting to proactive financial leadership.
📌 Services & Disclaimer
Acrux Advisory is not a CPA firm and does not provide services requiring a public accountancy license. All services are focused on accounting operations, financial reporting, and controller-level support. We do not provide audit, attest, or tax services that require licensure. Availability may vary, and engagements are accepted based on current capacity.