close-management | SkillBundle

Close Management

Important: This skill assists with close management workflows but does not provide financial advice. All close activities should be reviewed by qualified financial professionals.

Month-end close checklist, task sequencing and dependencies, status tracking, and common close activities organized by day.

Month-End Close Checklist

Pre-Close (Last 2-3 Business Days of the Month)

Send close calendar and deadline reminders to all contributors
Confirm cut-off procedures with AP, AR, payroll, and treasury
Verify all sub-systems are processing normally (ERP, payroll, banking)
Complete preliminary bank reconciliation (all but last-day activity)
Review open purchase orders for potential accrual needs
Confirm payroll processing schedule aligns with close timeline
Collect information for any known unusual transactions

Close Day 1 (T+1: First Business Day After Month-End)

Confirm all sub-ledger modules have completed period-end processing
Run AP accruals for goods/services received but not invoiced
Post payroll entries and payroll accrual (if pay period straddles month-end)
Record cash receipts and disbursements through month-end
Post intercompany transactions and confirm with counterparties
Complete bank reconciliation with final bank statement
Run fixed asset depreciation
Post prepaid expense amortization

Close Day 2 (T+2)

Complete revenue recognition entries and deferred revenue adjustments
Post all remaining accrual journal entries
Complete AR subledger reconciliation
Complete AP subledger reconciliation
Record inventory adjustments (if applicable)
Post FX revaluation entries for foreign currency balances
Begin balance sheet account reconciliations

Close Day 3 (T+3)

Complete all balance sheet reconciliations
Post any adjusting journal entries identified during reconciliation
Complete intercompany reconciliation and elimination entries
Run preliminary trial balance and income statement
Perform preliminary flux analysis on income statement
Investigate and resolve material variances

Close Day 4 (T+4)

Post tax provision entries (income tax, sales tax, property tax)
Complete equity roll-forward (stock compensation, treasury stock)
Finalize all journal entries — soft close
Generate draft financial statements (P&L, BS, CF)
Perform detailed flux analysis and prepare variance explanations
Management review of financial statements and key metrics

Close Day 5 (T+5)

Post any final adjustments from management review
Finalize financial statements — hard close
Lock the period in the ERP/GL system
Distribute financial reporting package to stakeholders
Update forecasts/projections based on actual results
Conduct close retrospective — identify process improvements

Task Sequencing and Dependencies

Dependency Map

Tasks are organized by what must complete before the next task can begin:

LEVEL 1 (No dependencies — can start immediately at T+1):
├── Cash receipts/disbursements recording
├── Bank statement retrieval
├── Payroll processing/accrual
├── Fixed asset depreciation run
├── Prepaid amortization
├── AP accrual preparation
└── Intercompany transaction posting

LEVEL 2 (Depends on Level 1 completion):
├── Bank reconciliation (needs: cash entries + bank statement)
├── Revenue recognition (needs: billing/delivery data finalized)
├── AR subledger reconciliation (needs: all revenue/cash entries)
├── AP subledger reconciliation (needs: all AP entries/accruals)
├── FX revaluation (needs: all foreign currency entries posted)

Critical Path

The critical path determines the minimum close duration. Typical critical path:

To shorten the close:

Automate Level 1 entries (depreciation, prepaid amortization, standard accruals)
Pre-reconcile accounts during the month (continuous reconciliation)
Parallel-process independent reconciliations
Set clear deadlines with consequences for late submissions
Use standardized templates to reduce reconciliation prep time

Status Tracking and Reporting

Close Status Dashboard

Track each close task with the following attributes:

Task	Owner	Deadline	Status	Blocker	Notes
[Task name]	[Person/role]	[Day T+N]	Not Started / In Progress / Complete / Blocked	[If blocked, what's blocking]	[Any notes]

Status Definitions

Not Started: Task has not yet begun (may be waiting on dependencies)
In Progress: Task is actively being worked on
Complete: Task is finished and has been reviewed/approved
Blocked: Task cannot proceed due to a dependency, missing data, or issue
At Risk: Task is in progress but may not meet its deadline

Daily Close Status Meeting (Recommended)

During the close period, hold a brief (15-minute) daily standup:

Review status board: Walk through open tasks, flag any that are behind
Identify blockers: Surface any issues preventing task completion
Reassign or escalate: Adjust ownership or escalate blockers to resolve quickly
Update timeline: If any tasks are at risk, assess impact on overall close timeline

Close Metrics to Track Over Time

Metric	Definition	Target
Close duration	Business days from period end to hard close	Reduce over time
# of adjusting entries after soft close	Entries posted during management review	Minimize
# of late tasks	Tasks completed after their deadline	Zero
# of reconciliation exceptions	Reconciling items requiring investigation	Reduce over time
# of restatements / corrections	Errors found after close	Zero

Common Close Activities by Day

Typical 5-Day Close Calendar

Day	Key Activities	Responsible
T+1	Cash entries, payroll, AP accruals, depreciation, prepaid amortization, intercompany posting	Staff accountants, payroll
T+2	Revenue recognition, remaining accruals, subledger reconciliations (AR, AP, FA), FX revaluation	Revenue accountant, AP/AR, treasury
T+3	Balance sheet reconciliations, intercompany reconciliation, eliminations, preliminary trial balance, preliminary flux	Accounting team, consolidation
T+4	Tax provision, equity roll-forward, draft financial statements, detailed flux analysis, management review	Tax, controller, FP&A
T+5	Final adjustments, hard close, period lock, reporting package distribution, forecast update, retrospective	Controller, FP&A, finance leadership

Accelerated Close (3-Day Target)

For organizations targeting a faster close:

Day	Key Activities
T+1	All JEs posted (automated + manual), all subledger reconciliations, bank reconciliation, intercompany reconciliation, preliminary trial balance
T+2	All balance sheet reconciliations, tax provision, consolidation, draft financial statements, flux analysis, management review
T+3	Final adjustments, hard close, reporting package, forecast update

Prerequisites for a 3-day close:

Automated recurring journal entries (depreciation, amortization, standard accruals)
Continuous reconciliation during the month (not all at month-end)
Automated intercompany elimination
Pre-close activities completed before month-end (cut-off, accrual estimates)
Empowered team with clear ownership and minimal handoffs
Real-time or near-real-time sub-system integration

Close Process Improvement

Common Bottlenecks and Solutions

Bottleneck	Root Cause	Solution
Late AP accruals	Waiting for department spend confirmation	Implement continuous accrual estimation; set cut-off deadlines
Manual journal entries	Recurring entries prepared manually each month	Automate standard recurring entries in the ERP
Slow reconciliations	Starting from scratch each month	Implement continuous/rolling reconciliation
Intercompany delays	Waiting for counterparty confirmation	Automate intercompany matching; set stricter deadlines
Management review changes	Large adjustments found during review	Improve preliminary review process; empower team to catch issues earlier
Missing supporting documents	Scrambling for documentation at close	Maintain documentation throughout the month

Close Retrospective Questions

After each close, ask:

What went well this close that we should continue?
What took longer than expected and why?
What blockers did we encounter and how can we prevent them?
Were there any surprises in the financial results we should have caught earlier?
What can we automate or streamline for next month?