The month-end close is a key component of managing a business. A month-end close checklist keeps all key activities on task. Here’s some tips on making sure key asset accounts are accounted for correctly. These tips can be incorporated into your month end close checklist.
1. Cash and Checks
Cash is the most prominent aspect of business. Thankfully, cash is easy to organize and reconcile.
- Record receipts
- Reconcile GL account balances against bank statements
- Verify all restricted cash (cash put aside for specific purposes) amounts
- Review outstanding checks older than 60 days, void as necessary
- Record deposits in transit (DIT) that will clear next month, compare previous months’ (DIT) to this month’s cleared deposits
2. Accounts Receivable / Payable
Sales are complicated and closing procedures can create a “limbo” for unpaid transactions. When a payment is the responsibility of the business, it’s accounts payable; if the payment is the responsibility of the customer, it’s accounts receivable.
- Distribute remaining invoices, match invoices with purchase number, and receipts
- Review aging reports for unapplied amounts
- Reconcile open orders with receipts
If your business includes physical goods, inventories should be accounted for, including raw material not yet turned into a finished product. Tracking inventory helps attain a firm grasp on turnover of goods.
- Ensure all inventory activity is recorded
- Note inventory that has been invoiced but not received, and vice versa
- Analyze perpetual inventory for reasonableness
- Determine if excess or obsolete inventory should be written off and make adjustments
It’s important to keep track of investments, as they can be nearly the same in value as cash.
- Obtain investment statements
- Calculate realized and unrealized gains and losses for journaling
5. Fixed Assets
Fixed assets, otherwise known as property, plant, and equipment (PP&E), are assets that cannot easily be converted to cash.
- Determine useful life
- Calculate depreciation of assets for journaling
Month End Close Automation for Your Business
End of month doesn’t have to be complicated or stressful. SkyStem’s ART automates the month end close checklist in addition to eliminating up to 40% of reconciliation volume. With quality reports and graphics, you’ll understand tasks and finances at a glance, in real time. Experience a crystal clear close with SkyStem.