A quick, accurate monthly close gives you the numbers you need to run your business. Here’s a guide to help you stay on track.

Desired End Result: Financial Statements

You’re “done” when you’re looking at meaningful financial statements. These are reports that give essential decision-making data to you, your banker, your investors, and your tax person.

All of these can be memorized in QuickBooks and generated in seconds:

• Profit and Loss (P&L)
• Balance Sheet
• Statement of Cash Flows
• Accounts Receivable Aging Summary (A/R)
• Accounts Payable Aging Summary (A/P)

How Do You Get There? Three Easy Steps…

1. Complete data entry. Important items here:

• Bank, credit card, loan, and line of credit transactions all entered and accounts reconciled
• Customer invoices/sales all entered and dated in the correct month
• Vendor bills/checks all entered and dated in the correct month
• Payroll entries current including wages, payroll tax, worker’s compensation, PTO, and retirement plan deferrals and liabilities
• Other key accruals entered such as general liability insurance

2. Line by line review of financial statements

• P&L
• Balance Sheet
• Support schedules
• General ledger detail

3. Work the punch list of open items

• Last month’s open items addressed
• Suspense account is actively managed; items aren’t stuck in there and left for dead until tax time
• Update the punch list so it’s current - makes it easy to pick up where you left off
• If an item’s hung up on the punch list, you might have a systemic problem to fix.

Commitment

The key to the monthly close is a commitment to the process.

I guarantee it: you’ll never have “more time” to catch up later.

But if you ever get audited, run into a cash flow crisis, work on government contracts, take on partners or try to sell your business, you will be thankful you had the foresight to close the books promptly month in and month out.