Perform your month-end close

Why perform the month end close? 

You perform month end close to maintain accurate and consistent financial data. This helps you identify discrepancies and generate precise financial data. 

How to perform the month-end close? 

 Here’s the checklist and steps to take:  

1. Month end close date: You must be ready for your month-end closing process at least three to five days before the month end period. You’ll need to implement a month-end closing checklist for your business to make sure you haven’t missed anything.  
2. Collect information for the month end period: Start collecting information based on accrued expenses and prepayments, all income statements and balance sheet accounts including inventory count.  
   1. Ensure all customer and vendor invoices and receipts, payments are recorded in Wiise 
   2. Check if all journal entries have been posted  
   3. Check on your investment income, rental income and other income 
   4. Check on your expenses relating to payroll, insurance, rent/lease, utility bills, cost of goods, travel or business loan interest.  
   5. Collect information based on bank statements and any outstanding deposits. 
   6. Identify if any balances need to be updated. These could include insurance premiums and prepaid subscriptions and patents.  
   7. Identify if there are any employee reimbursements 
   8. Close the posting date range for all employees and allow posting in the previous period on a need's basis.  
3. Accounts Payable and Receivable: Your business can avoid payment issues with clients and suppliers during the month end close by: 
   1. Generating aged receivables report and aged payables reports,  
   2.  Considering discounts or credit notes for disputes or returns, 
   3.  Following up with clients who have past-due payments 
   4.  Discussing in advance credit terms with suppliers.  
4. Reconcile all bank accounts: Perform your bank account reconciliations. If you need to, you may need to perform payment journal reconciliation for your bank accounts. This also includes your petty cash.  
5. Review inventory and fixed assets: Perform an inventory stocktake, reconcile, and post any stocktake adjustments. Calculate depreciation and post depreciation expenses. 
6. Payroll, tax and GST reconciliation: Finalise all payroll-related transactions. Transactions are to be accurately recorded and reconciled in the financial statements for that month. Verify employee hours and payruns by ensuring compliance with tax regulations. 
   1. There could be accrued tax that applies to property or payroll.  
   2. Consider employees or the business that benefits from Fringe Benefit Tax 
   3. Your business may be eligible for R&D tax benefits 
   4. Review superannuation to be paid to your employees.  
   5. Accrue any salaries and wages expenses  
7. Generate and review financial statements:  
   1. Run the Income Statement, Balance Sheet, Cash Flow Statement and other reports including operational reports that will help for your month end closing period. Review any errors that may occur in the financial statements and communicate with your staff to rectify them efficiently.  
   2. You may need to reopen the posting dates ranges for minor changes so make sure to implement lessons learned as corrective actions that can help you with risk management of your business. 
8. Coordinate with cross-functional teams: Set up time frames and give each team member a specific task to complete and plan frequent check-ins with your staff. 
9. Document your workflow: Incorporate a business policy, standardise your financial documentation procedures, and document your month-end process. 
10. Prepare for next month's end closing: Take your learning from the prior month and apply to make the next month easier. Improve your workflow processes and update deadlines. Communicating with your staff ahead of time is key to getting everyone on board.  

What’s next? 

Find out how to do balance sheet reconciliation after your month end closes. 

Need more help?   

No problem, that's what we're here for. Reach out to support@wiise.com anytime you can't find what you're looking for.