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What is the month-end close process?

The month-end close process locks subledger cutoffs, reconciles balance sheet accounts, books accruals and adjustments, revalues and eliminates intercompany activity, consolidates and reviews the result, then locks the period. Each step depends on the one before it, which is why skipping ahead usually causes rework rather than saving time.

Zuny FesterBy Zuny Fester, Head of Operations and Marketing
Reviewed by Zuny Fester
Published Last reviewed Editorial policy

Part of the month-end close guide.

Step 1Lock subledger cutoffs
Step 2Reconcile balance sheet accounts
Step 3Book accruals and adjustments
Step 4Revalue, eliminate, consolidate, review, then lock

Why the order can't be shuffled

Each step in the process assumes the prior one is genuinely complete, not just started. Booking accruals before reconciliations are done risks basing an adjustment on a balance that's about to change. Running intercompany elimination before currency revaluation is exactly what leaves an unexplained currency delta. The process's reliability comes from following this order strictly, not from finishing faster by parallelizing steps that depend on each other.

Next step

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Checklist

The month-end close process, task by task

  • Lock AP, AR, and payroll cutoffs for the period
  • Reconcile bank accounts, AP and AR subledgers, prepaid and accrued schedules
  • Book accruals for expenses incurred but not yet billed
  • Revalue and eliminate intercompany balances
  • Consolidate entities and review the result
  • Lock the period against further posting

Frequently Asked Questions

Independent subledger reconciliations (AP, AR, payroll) can run in parallel; steps with real dependencies, like elimination after revaluation, cannot without risking errors.

A thorough review before locking — rushing this is how an error survives into a reported, locked period.

Yes — intercompany revaluation and elimination don't apply without multiple entities, which is one reason single-entity closes are typically faster.

Sources

Related

Topic

Month-End Close

Month-end close is the set of accounting tasks a company runs after a calendar month ends to turn raw transactions into a finished, trustworthy set of financial statements: reconciling subledgers, boo…

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Definition

What is month-end close?

Month-end close is the set of accounting tasks run after a calendar month ends to turn raw transactions into finished, trustworthy financial statements: reconciling subledgers, booking accruals, eliminating intercompany activity, reviewing the result, and locking the period so nothing more can post without an explicit reopen.

Read more

How-to

What should be on a month-end close checklist?

A complete close checklist covers subledger lockout, bank and balance-sheet reconciliations, accrual entries, intercompany revaluation and elimination if applicable, inventory review if applicable, consolidated review, and period lock. Each task should have a clear owner and a place in the dependency order, not just a due date.

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