The Wallace Foundation publishes a monthly close plan as a spreadsheet, a sample close process for nonprofits prepared by BDO FMA. It has 28 recurring monthly tasks, five more that run only at quarter end, and one column worth more than the task list: who is responsible.
Three columns carry the content. The task. The staff member responsible. The prior task that has to finish first. Nineteen of the 28 monthly tasks name senior staff as responsible, and 13 of the 28 cannot start until something else is done.
That middle column is the whole point.
A month-end close checklist is not a task list, it is an ownership map, because the tasks themselves are commodity and the thing that actually constrains a close is review.
A month-end close checklist is a control document that lists every task required to finalize a period's books, and assigns each one an owner, a required piece of evidence and a reviewer sign-off. A close is finished when the accounts tie to their supporting statements and a named reviewer has signed, not when every box is ticked.
Key takeaways
- The tasks in a month-end close are the same everywhere. What separates a safe close from a fragile one is the owner column and the evidence column.
- In the sample close plan the Wallace Foundation publishes, prepared by BDO FMA, 19 of the 28 recurring monthly tasks name senior staff as responsible, and 13 of the 28 cannot start until a prior task finishes.
- OpenStax's Principles of Accounting states that companies are required to close their books at the end of each fiscal year, and that most companies prepare monthly financial statements and close their books annually. On that pattern the four closing entries are an annual step, and posting them every month resets the year-to-date profit and loss.
- Define done before the month starts. Done means the account ties to a source document and a named reviewer signed with a date.
- Before confidential client information reaches a third-party service provider, the AICPA Code of Professional Conduct gives you exactly two routes: a contractual confidentiality agreement with reasonable assurance of controls, or specific client consent.
What is a month-end close checklist?
A month-end close checklist is a repeatable control document that lists every task needed to finalize a period's financial records, and assigns each task an owner, a piece of supporting evidence and a reviewer sign-off. It is the artifact you reach for when a client, a lender or an auditor asks how a number was arrived at.
The task list is the part that is already solved. Every close reconciles cash, ties out the subledgers, posts accruals and reviews variances. Nobody is failing because they forgot bank reconciliation exists.
They fail because "reconciled" meant a box was ticked, and nobody can now say who ticked it, against which statement, or whether anyone looked.
What does month-end closing consist of?
Month-end closing consists of three phases: readiness work done before the period ends, posting and reconciliation done after it ends, and a review-and-lock phase that decides whether the books are actually finished.
- Pre-close readiness. Cutoffs are confirmed, owners and reviewers are assigned by account group, materiality thresholds are set, and the documents that are always late are chased before they are late.
- Post, reconcile and tie out. Transactions are recorded, every cash and card account is reconciled to a statement, subledgers are agreed to the general ledger (GL), and accruals, prepaids and depreciation are posted with the calculation saved.
- Review, sign off and lock. A flux review explains what moved, a named reviewer signs by account group, unresolved items go to an exception log, and the period is locked so nothing can be posted into it quietly.
Closing your own company's books is one set of dependencies. Closing a roster of clients' books, on different chart-of-accounts structures, with a review team that has to be consistent across all of them, is a different problem wearing the same word. The tasks look identical. The failure mode does not.
What are the steps for the month-end closing?
The steps for a month-end close run in dependency order: confirm cutoff, capture the source documents, post the period's transactions, reconcile every balance sheet account to an external statement, post adjusting entries, review the fluctuations, obtain reviewer sign-off, and lock the period.
Below is that sequence as a working checklist, grouped into the three phases. Each item names who owns it. Tick them as you go.
Phase 1. Before the period closes
The pre-close phase exists so that the close does not begin by waiting. Everything here happens in the last week of the month, not the first week of the next one.
- [ ] Confirm the period cutoff date in writing with whoever submits documents. Owner: preparer.
- [ ] Confirm every bank, credit card and payment-processor feed has pulled through the final day of the period. Owner: preparer.
- [ ] Chase the documents that are always late: payroll register, merchant statements, loan statements, inventory count. Owner: preparer.
- [ ] Set or confirm the materiality threshold for this entity, by account group. Owner: senior reviewer.
- [ ] Assign an owner and a reviewer to each account group, by name, before the month ends. Owner: manager.
- [ ] Confirm which recurring journal entries reverse this period and which do not. Owner: senior reviewer.
- [ ] Reopen last month's exception log and confirm every item was resolved, not carried. Owner: senior reviewer.
Phase 2. Post, reconcile and tie out
This is the phase everyone means when they say "the close." Six of its nine tasks can sit with a preparer, provided the evidence requirement is explicit.
- [ ] Record all revenue for the period and flag anything earned but not yet invoiced. Owner: preparer.
- [ ] Record all expenses, including employee expense reports and unbilled vendor invoices. Owner: preparer.
- [ ] Reconcile every bank and credit card account to the statement, not to the feed. Owner: preparer.
- [ ] Agree the accounts receivable (AR) aging to the GL control account and review unapplied cash. Owner: preparer.
- [ ] Agree the accounts payable (AP) aging to the GL control account and investigate debit balances. Owner: preparer.
- [ ] Post payroll and payroll liability entries, and agree accrued wages to the payroll register. Owner: senior reviewer.
- [ ] Post accruals, prepaid amortization and deferred revenue movements, saving the calculation file. Owner: senior reviewer.
- [ ] Record fixed asset additions, disposals and depreciation for the period. Owner: senior reviewer.
- [ ] Clear every suspense, clearing and undeposited-funds account to zero, or explain the balance in writing. Owner: preparer.
Phase 3. Review, sign off and lock
Nothing in Phase 2 counts until this phase happens. A close without a signature is a draft with good intentions.
- [ ] Run the trial balance and confirm it balances before a reviewer opens the file. Owner: preparer.
- [ ] Run a flux review on the profit and loss against prior month and same month last year, with written explanations above the threshold. Owner: senior reviewer.
- [ ] Scan the balance sheet for negative balances, stale reconciling items, and accounts that should have moved and did not. Owner: senior reviewer.
- [ ] Confirm every reconciliation carries its evidence: the statement, the calculation file, the aging report. Owner: quality reviewer.
- [ ] Sign off by account group, with a name and a date, not a checkmark. Owner: quality reviewer.
- [ ] Log every unresolved item in the exception log with an owner and a due date. Owner: manager.
- [ ] Lock the period in the software and set the closing-date password. Owner: manager.
- [ ] Issue the reporting package and record what was sent, to whom, and when. Owner: manager.
Twenty-four tasks. The number is unremarkable. The two columns attached to each one are not.
A close task is done when three things are true: the account agrees to a source document outside your accounting software, the evidence is attached where the next person can find it, and a named reviewer has signed with a date. A tick mark satisfies none of these.
Which accounts should you reconcile every month, and what proves it?
Reconcile every balance sheet account that can be agreed to something outside your accounting software, every month, without exception. The table below is the minimum set, with what "done" means for each and the evidence that proves it.
| Account | Done means | Evidence to attach |
|---|---|---|
| Operating bank accounts | Ending balance agrees to the bank statement; every reconciling item is explained | Bank statement, reconciliation report |
| Credit cards | Statement balance agrees to the GL liability | Card statement, reconciliation report |
| Payment processors | Gross receipts, fees and payouts are separated and agree to the processor report | Processor settlement report |
| Accounts receivable | Aging total agrees to the GL control account; unapplied cash is reviewed | AR aging, unapplied-cash listing |
| Accounts payable | Aging total agrees to the GL control account; debit balances are investigated | AP aging, debit-balance listing |
| Payroll liabilities | Accrued wages and taxes agree to the payroll register | Payroll register, tax filing confirmations |
| Clearing and suspense | Balance is zero, or the balance is explained in writing | Account detail with written explanation |
| Undeposited funds | Balance is zero, or every open item is a genuine in-transit deposit | Account detail, deposit slips |
| Prepaid expenses | Remaining balance agrees to the amortization schedule | Amortization schedule |
| Deferred revenue | Remaining balance agrees to the revenue schedule | Revenue recognition schedule |
| Fixed assets | Additions, disposals and accumulated depreciation agree to the fixed-asset register | Fixed-asset register, depreciation schedule |
| Loans and notes payable | Principal balance agrees to the lender statement; interest is accrued | Lender statement, amortization schedule |
Two accounts on that list do most of the damage when they are skipped. Clearing accounts hide breaks, because a balance that never moves looks like a balance that is correct. Undeposited funds hides duplicate revenue, because the duplicate looks like an in-transit deposit until someone opens the detail.
Both are evidence failures. The task got done; the detail behind it went unchecked.
Who should own each task in the close?
Four roles own a close. A preparer records and reconciles. A senior posts the judgment entries, sets materiality and runs the flux review. A quality reviewer confirms the evidence is attached and signs by account group. A manager assigns the owners before the month begins, logs the exceptions, locks the period and issues the reporting package.
Across the 24 tasks above, 10 sit with the preparer. The other 14 do not.
Eight of the 14 need a senior's judgment. Two need a quality reviewer's signature. Four are control acts: assigning owners before the month begins, logging exceptions, locking the period, issuing the reporting package.
There is a familiar complaint underneath that split. A partner adds preparers, the preparation flies, and the close still lands late. Preparation was never the constraint. Judgment does not parallelize by adding hands.
What one published close plan records
The Wallace Foundation's Monthly Closing Project Plan is an .xlsx file prepared by BDO FMA (© BDO FMA LLC, 2022) and published free on the foundation's site. Its instructions sheet describes it as a template that "outlines a sample financial closing process for a nonprofit organization."
Its "Closing Process" sheet numbers each activity in its own row. Count them: 28 recurring monthly tasks, and five more that run only at quarter end. Ahead of a four-week Gantt grid, three columns carry the content: Activity/Task, Staff Responsible, and Prior Activities.
The Staff Responsible column reads "Senior Staff" on 19 of the 28 monthly rows, "Staff" on 8, and "Program Staff" on 1.
Read the instructions before you read that ratio. Column C "lists suggested staff responsibilities," and the template says outright that "the assignments listed here are general in nature and should be used only as guidelines." That is one advisory firm's suggested split for a nonprofit finance function, not a measurement of anything, and one of the three roles has no analogue in a CPA firm. It is not a benchmark for your close. What is worth taking from it is the columns, not the ratio.
Staff Responsible tells you who is accountable. Prior Activities tells you what is blocked, and by whom. Copy those two columns into your own checklist and the close becomes schedulable. Leave them out and you have a to-do list that tells you nothing about what is waiting, or on what.
The design lesson is narrower than "hire seniors." It is that a close you can staff is a close whose rows carry a name and a dependency.
What are the 4 basic closing entries, and do they belong in a monthly close?
The four closing entries are: revenue accounts to Income Summary, expense accounts to Income Summary, Income Summary to Retained Earnings, and Dividends to Retained Earnings. Companies are required to close their books at fiscal year end, and most prepare monthly financial statements while closing their books annually, so on the common pattern the four entries run once a year rather than every month.
OpenStax's Principles of Accounting, Volume 1, section 5.1, sets the four out in order: "The first entry closes revenue accounts to the Income Summary account." "The second entry closes expense accounts to the Income Summary account." "The third entry closes the Income Summary account to Retained Earnings." "The fourth entry closes the Dividends account to Retained Earnings."
The same section states the timing plainly: "Companies are required to close their books at the end of each fiscal year," and "most companies prepare monthly financial statements and close their books annually."
That is the distinction. Closing entries zero the temporary accounts, revenue, expenses and dividends, into retained earnings. Permanent accounts, the balance sheet, carry forward. A monthly close of the kind this checklist describes prepares interim financial statements and locks the period. It does not zero the income statement, because the year-to-date profit and loss has to keep accumulating.
"Closing the month" means: reconcile, review, sign off, lock the period. "Closing entries" means: transfer the temporary account balances to retained earnings when the books are closed, which companies are required to do at each fiscal year end. Post the four closing entries every month and your year-to-date profit and loss resets 12 times a year. Checklists that put them in the same list are conflating two operations.
If a monthly close is done well, the year-end close is short. The four entries take minutes. The twelve months of evidence behind them are what took the year.
What is the difference between a month-end close and a year-end close?
A month-end close produces interim financial statements and locks the period. A year-end close does everything the monthly close does, then adds the annual procedures: the four closing entries, the tax provision or return-basis adjustments, and whatever an auditor or lender requires.
| Dimension | Month-end close | Year-end close |
|---|---|---|
| Purpose | Interim reporting, early error detection | Annual statements, tax filing, audit support |
| Closing entries posted? | No | Yes, the four entries |
| Temporary accounts | Keep accumulating year to date | Zeroed to retained earnings |
| Additional procedures | The monthly set only | Tax provision, audit schedules, disclosures |
| What it depends on | This month's reconciliations | Twelve months of them |
The practical consequence for a firm is that the year-end close is a lagging indicator of the monthly one. A painful year end points back to the monthly close, not to the year-end procedures themselves.
How long should a month-end close take?
A month-end close should take as long as its dependencies, which means the honest answer is a range set by when your source documents arrive, not by how fast your team works.
The University of Georgia sets the rule for its own books in its Month End Close Procedures quick reference guide: "Accounting periods must be closed by the university within 10 days of the end of the month." That is one institution's policy, on one set of books, published as a hard window. It is a target to reason from, not a benchmark to hold your firm to.
What you can control is the dependency chain. Thirteen of the 28 tasks in the BDO FMA plan cannot start until a prior task finishes. A close cannot end before the last document it depends on arrives, and staffing does not move that date. If the merchant statement lands on day eight, the close finishes after day eight.
Three levers actually shorten a close, in order of effect:
- Move work before the period ends. Cutoff confirmations, feed checks and document chasing are pre-close tasks. Doing them on day one of the close is doing them a week late.
- Attack the dependencies, not the tasks. Find the task the most other tasks wait on, and pull it earlier. In the BDO FMA plan, 13 of the 28 rows carry a prior activity. Those rows are the schedule; the rest is capacity.
- Set materiality before review, not during it. A reviewer who has to decide what matters while reviewing is doing two jobs, and the second one is slower.
How do you prepare a closing checklist for your own firm?
Build a close checklist in five steps: list the tasks, add an owner column, add an evidence column, add a dependency column, and define what "done" means before you use it.
- Draft the task list once, from your largest client. Their close contains almost every task a smaller client's close contains. Delete rather than add.
- Add the owner column, by role and by name. Role tells you who should do it. Name tells you who will. Both go in before the month ends, not while the close is running.
- Add the evidence column. For each task, write the one artifact that proves it happened: a statement, a schedule, an aging, a calculation file. If you cannot name the artifact, the task is not specific enough yet.
- Add the dependency column. For each task, note the task that has to finish first. Most will have none. The ones that do are your critical path.
- Write the definition of done at the top and enforce it. Done means the account agrees to a source outside your software, the evidence is attached, and a named reviewer signed with a date.
Notice that the evidence column is yours to invent. It is not in the BDO FMA plan. It is the column that turns a status report into a control.
What changes when your firm closes many clients' books instead of one?
When a firm closes many clients' books, the tasks stay identical and three things change: review becomes the bottleneck, consistency across reviewers becomes a quality risk, and "what is blocked right now" becomes the only status question that matters.
An internal finance team closes one set of books, once, with the same reviewer every month. A firm runs the same 24 tasks across every client on its roster, in parallel, against a review team that has to reach the same conclusion on the same fact pattern regardless of who picks up the file. That is what makes recurring accounting work run through a layered review chain a different discipline from a single company's close.
Close guidance written for a company's internal finance or financial planning and analysis (FP&A) team optimizes the tasks of closing one set of books. A firm's close is not constrained by the tasks. It is constrained by review capacity.
Three things hold up under volume:
- One standard, one template. Client-specific quirks live in an addendum, never in a separate checklist. A reviewer moving between clients should be reading the same document.
- Evidence, not status. "Complete" is a claim. An attached reconciliation is a fact. Under volume, only facts survive.
- A blocked list, not a done list. With one client you track progress. With a roster you track exceptions. The only useful daily question is which closes are waiting, and on what.
None of it is a software problem. Each of those depends on the owner column and the evidence column.
Where a month-end close actually breaks
Every failure pattern below has the same shape: the checklist recorded activity instead of validation. These are the ones worth designing against.
1. "Done" means the box is ticked. A preparer marks the bank reconciliation complete. It reconciles to the feed, not to the statement, and the feed missed three days of a closed card. The break surfaces in the next audit, or in a client's question about a number that never made sense. Fix: the definition of done requires the evidence artifact attached. No statement, no tick.
2. The reviewer is whoever is free. Two clients with the same fact pattern get two different treatments, because two different seniors reviewed them. Neither is wrong. They are inconsistent, and inconsistency is what a client notices when they compare their statements year over year. Fix: assign reviewers by account group before the month ends, and keep the assignment stable across months.
3. The close starts on the first of the month. Day one is spent chasing a payroll register and a merchant statement that could have been requested a week earlier. The team then absorbs the delay by compressing review, which is the one phase that should never be compressed. Fix: move all seven Phase 1 tasks into the last week of the month. The close should begin already ready.
4. Late entries land after review and nobody knows. Someone posts an adjustment into a period a reviewer already signed. The signed financials and the software no longer agree, and no one finds out until the next reporting cycle contradicts the last one. Fix: lock the period. Set the closing-date password. Any post-lock entry requires an approval and a line in the change log.
5. Every client's checklist is a little different. A different file per client, a different definition of done per file. A new reviewer learns the client rather than the standard, and the firm's quality becomes a function of tenure rather than of process. This is the failure an internal finance team never has and a firm always risks. Fix: one master checklist. One addendum tab per client for genuine exceptions. Nothing else varies.
Can you hand the month-end close to someone outside your firm?
Yes. The AICPA Code of Professional Conduct addresses it directly, and interpretation 1.300.040 .01 names bookkeeping as one of the services a third-party service provider may assist with. What does not transfer is your name on the work.
Two provisions matter.
On confidentiality. Interpretation 1.700.040 of the AICPA Code of Professional Conduct states that before disclosing confidential client information to a third-party service provider, the member should do one of two things. Either "Enter into a contractual agreement with the third-party service provider to maintain the confidentiality of the information and provide reasonable assurance that the third-party service provider has appropriate procedures in place to prevent the unauthorized release of confidential information to others," or "Obtain specific consent from the client before disclosing confidential client information to the third-party service provider." Those are the two routes, and they are alternatives, not a sequence.
On the work itself. Interpretation 1.300.040 .01 of the AICPA Code places bookkeeping among the services a third-party service provider may assist with. Assist is the operative word. The same paragraph requires the member to "adequately plan and supervise the third-party service provider's professional services so that the member ensures that the services are performed with competence and due professional care." The engagement stays with the firm, and so does the signature at the end of it.
The provisions above are quoted from the AICPA Code of Professional Conduct (© 2025 AICPA edition). State board rules may impose additional requirements. Tax return information carries separate obligations under Internal Revenue Code section 7216, and 26 CFR 301.7216-1 defines that term as information "furnished in any form or manner for, or in connection with, the preparation of a tax return," excluding "information identical to any tax return information that has been furnished to a tax return preparer if the identical information was obtained otherwise than in connection with the preparation of a tax return." Read the current Code and check your state board before you change how your firm handles client information.
Practically, that means the close checklist has to survive the handoff intact. The owner column now names someone outside the firm for most of the Phase 2 tasks. The evidence column becomes non-negotiable, because you can no longer walk to a desk and ask. The sign-off column stays inside your firm, on every single task, permanently.
Which is a fair summary of what does and does not move. The preparation moves. The reconciliation moves. The review can be layered, with a preparer, a senior and a quality reviewer working before anything reaches you. The signature does not move, and neither does the judgment behind it.
Here is the honest counter-case. If your firm has no documented close process today, handing it outside will not create one. You will export the ambiguity and receive it back with a longer feedback loop. Build the checklist first. And if you close books for only a handful of clients, the coordination overhead may cost you more than the capacity it buys you, so tighten your own Phase 1 before you look outward.
Frequently asked questions
What does closing the books actually mean?
Closing the books means a period's accounts have been reconciled to sources outside the accounting software, reviewed against a materiality threshold, signed by a named reviewer, and locked so nothing can be posted into the period without an approval. Producing financial statements is one output of closing the books; it is not what closing means.
Who is involved in a month-end close?
Four roles: a preparer who records and reconciles, a senior who posts judgment entries and runs the flux review, a quality reviewer who confirms the evidence and signs by account group, and a manager who assigns owners, logs exceptions and locks the period. In a small firm one person may wear two of these hats. Wearing all four removes the control the checklist exists to create.
Should a firm use one close checklist for every client?
Yes, with a per-client addendum. One master checklist keeps the definition of done constant across reviewers, which is what protects quality when a file moves between people. Client-specific tasks (an inventory count, a grant allocation, an intercompany elimination) belong in an addendum attached to the master, never in a separate file.
Is a spreadsheet enough to run a firm's month-end close?
A spreadsheet is enough if it has an owner column, an evidence column, a dependency column and a reviewer sign-off with a date, and if only one controlled version exists. It stops being enough when multiple versions circulate, when evidence lives in individual inboxes, or when nobody can answer which closes are blocked without opening every client's file.
Can you reopen a closed period?
Technically yes, in most accounting software, and that is precisely why the closing-date password exists. A reopened period means previously issued financial statements no longer agree to the ledger. If you must reopen, log the reason, the approver and the entry, and reissue anything that was already sent.
Where this leaves you
The tasks in your close are the easy part. A longer checklist will not fix a close that breaks; the constraint is review. The BDO FMA close plan is free to download, and the thing worth stealing from it is not the task list. It is two columns: who is responsible, and what has to finish first.
Add an evidence column of your own, define done before the month starts, and the close becomes something you can schedule, staff and defend. Build it once. Use it on every client.
Then the honest question is capacity. Of the 24 tasks, 10 need judgment rather than data entry. If the people supplying that judgment are the same people signing your returns, the checklist has told you exactly where your firm's ceiling sits. You can raise it three ways: reduce the review each file needs, add reviewers, or move the preparation and the early layers of review off your own desk.
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