Basic Accounting Monthly Closing Checklist

 

 

1. Bank Reconciliation:
   – Review and reconcile bank statements.
   – Verify outstanding checks and deposits.

   Journal Entries:
   – Record adjusting entries for accruals and deferrals.
   – Update depreciation for fixed assets.
   – Adjust prepaid expenses and unearned revenue.

   3. Accounts Receivable:
   – Reconcile accounts receivable.
   – Verify the allowance for doubtful accounts.

   4. Accounts Payable:
   – Reconcile accounts payable.
   – Confirm the accuracy of recorded expenses.

   5. Payroll:
   – Review payroll transactions for accuracy.
   – Confirm tax withholdings and other deductions.

   6. Fixed Assets:
   – Update fixed asset registers.
   – Record disposals or additions to fixed assets.

   7. Inventory:
   – Verify physical inventory against recorded amounts.
   – Adjust inventory levels as needed.

   8. Liabilities:
   – Confirm all liabilities are recorded.
   – Reconcile outstanding loans or credit balances.

   9. Expense Review:
   – Review all expenses for accuracy and proper classification.
   – Confirm that all incurred expenses are recorded.

   10. Revenue Recognition:
   – Confirm proper recognition of revenue.
   – Review deferred revenue and recognize as appropriate.

   11. Financial Statements:
   – Generate financial statements (Income Statement, Balance Sheet, Cash Flow Statement).

   12. Analysis:
   – Analyze financial statements for trends and anomalies.
   – Conduct variance analysis against budget/forecast.

   13. Closing Entries:
   – Close temporary accounts (e.g., revenue, expenses) to retained earnings.

   14. Documentation:
   – Ensure all supporting documentation is filed appropriately.
   – Maintain a clear audit trail for all transactions.

   15. Backup and Security:
   – Backup financial data and store it securely.
   – Review access controls and restrict as necessary.

   16. Final Review:
   – Perform a final review of the entire closing process.
   – Confirm all necessary steps have been completed accurately.

   17. Reporting:
   – Share financial reports with relevant stakeholders.
   – Address any queries or concerns.

   18. Compliance:
   – Ensure compliance with accounting standards and regulations.
   – Document any changes in accounting policies or practices.

   19. Future Planning:
   – Identify areas for process improvement.
   – Plan for upcoming months and potential challenges.

   20. Audit Preparation:
   – Prepare for internal or external audits.
   – Document any issues or areas of concern for follow-up.