Overview of Bookkeeping and Month end closes
As a small business owner, you may find yourself struggling to keep up with your business’s books. As soon as you know it, another month has passed and you’ve fallen behind recording transactions.
Sure, closing your books can be stressful and time-consuming. But if you have a monthly closing process and checklist in place, you’ll be finishing accounting tasks and reconciling accounts in no time.
So, how can you simplify your responsibility of closing your books monthly? Say goodbye to disorganized books and hello to a month-end closing procedure.
Five Steps for the Accounting Month-End Close
The month-end close is an accounting procedure that occurs near the end of the month to close out a posting period. It is essential that this report is completed in a timely manner, in order to allow management to review and make better business decisions. The details of the accounting month-end close can be managed more effectively when processes and procedures are set-up within the accounting department and followed by the organization.
The common accounting month-end close tasks include:
- Record all financial transactions
- Reconcile balance sheet accounts
- Review of income & expense accounts
- Prepare financial statements
- Financial review with CFO and management
A best practice tip for the accounting month-end close is to develop a checklist. By following an accounting month-end checklist, it is easier to analyze a company’s profitability and progress on a regular basis. The checklist enables for a logical process to follow and relieves some of the complexities of properly accounting for the business.