Month-End Close Checklist

A month is not closed because the calendar moved. It is closed when every account is reconciled, every balance is explained, and someone has actually looked at the result.

Work through this in order — later steps depend on earlier ones being right.

1. Get everything in

• All bank statements downloaded — operating, savings, and trust
• All credit card statements downloaded
• Bank feed queue emptied: every transaction categorised, nothing left “For Review”
• Outstanding receipts collected and attached
• Payroll for the period recorded

2. Reconcile

• Operating account reconciled to the statement
• Savings reconciled
• Every credit card reconciled
• Merchant / payment processor account reconciled, including fees

Do not force a reconciliation with a plug entry. An account that will not balance is telling you something, and the plug hides whatever it was.

3. Trust — the non-negotiable step

• Trust bank statement adjusted for deposits in transit and outstanding cheques
• Adjusted bank balance compared to the book balance
• Every client ledger listed and totalled
• All three balances agree exactly
• No client ledger shows a negative balance
• Reconciliation saved with the supporting statement and ledger listing
• Any variance investigated before the month closes

Full detail in the monthly IOLTA routine.

4. Receivables

• All invoices for the period issued
• All payments received applied to the correct invoices
• AR aging report generated
• Accounts newly moved into a worse bucket flagged for follow-up
• Retainer balances checked against your minimums; replenishment requests raised
• Anything genuinely uncollectible identified for a write-off decision

5. Payables and case costs

• All vendor bills entered and coded
• Case costs coded to the correct matter, as Advanced Client Costs, not expenses
• Unbilled advanced costs reviewed — anything recoverable that has not been billed back
• Upcoming large payments noted for cash flow
• New vendors have a W-9 on file

6. Adjustments

• Depreciation recorded
• Prepaid expenses amortised for the period
• Accrued expenses recorded, if you report on accrual
• Earned fees moved from Unearned Fees to income
• Owner draws and distributions recorded correctly

7. Review before you call it closed

• Profit and loss reviewed against the prior month and the same month last year
• Balance sheet reviewed — does every balance make sense, and can you explain each one?
• Any account with an unexpected sign investigated (a negative asset, a positive contra)
• Practice-area or matter reporting reviewed if you track it
• Cash position and near-term commitments reviewed

8. Close and distribute

• Books locked or closed for the period, so nothing changes retroactively
• Reports delivered to whoever needs them
• Anything unusual noted in writing for the file

The step people skip

Number seven.

It is entirely possible to reconcile every account, close cleanly, and never once look at what the numbers say. Firms do it for years.

Reconciliation proves the books are accurate. It does not tell you that collections dropped 20% this month, that one practice area has been unprofitable for two quarters, or that a client ledger has sat untouched since last spring.

That takes ten minutes of someone actually reading the reports — which is, in the end, the entire reason the other seven steps exist.