A month-end close turns a month of transactions into numbers you can trust. You get a profit and loss, a balance sheet and a clear view of cash.
It is also the cheapest time to fix errors, because the month is fresh. This checklist is for a small retail or distribution business. The order is simple: match first, then adjust, then report, then lock.
Before you start: set dates
Pick a cut-off time, for example midnight on the last day. Pick a deadline, for example the fifth working day.
Tell everyone when their part is due: till closes, supplier bills, expense claims, payroll hours. A close that depends on chasing people always runs late.
Step 1: Make sure everything is in
- Close every till session in every branch. Count the cash and write down any difference.
- Post all sales, including offline sales that arrived late.
- Enter goods received for every delivery before month-end, against the purchase order.
- Enter supplier bills, even unpaid ones, so costs land in the right month.
- Collect expense claims and petty cash with receipts.
- Finalise attendance, leave and overtime for payroll.
Anything entered after cut-off belongs to next month, unless it records something that happened before cut-off. Use one rule and stick to it.
Step 2: Match the money
This is the most important step.
- Cash: for each branch, compare takings in the system with cash counted and banked. Look into every difference.
- Mobile money: compare the month’s statement with sales paid by mobile money. See how to match mobile-money statements to sales.
- Bank: compare your bank account in the books with the bank statement. List items in the books that are not on the statement yet, such as cheques. List items on the statement that are not in the books, such as fees, interest and unexplained deposits.
- Card payments: compare what the card company paid you with the sales behind it, after fees.
Do not move on until each difference is explained. Or list it as outstanding, with a named owner.
Step 3: Stock
- Count at least your high-value and fast-selling items. Count the whole store if you can.
- Post the count differences with a reason. Above your limit, get approval.
- Check stock in transit between branches. Anything in transit for long needs chasing.
- Look for negative stock, and for slow or expired items that may need writing down.
- Compare the value of stock in the stock report with the stock account in the books. They should agree.
Step 4: Money customers owe
- Run the overdue report. It shows what customers owe and for how long.
- Match payments received to invoices. Payments not matched make the report wrong.
- Chase overdue accounts, starting with the largest and oldest.
- Review credit limits for customers who are over their limit or paying slowly.
- Consider setting aside money for debts you do not expect to collect. Ask your accountant.
Step 5: Money you owe suppliers
- List unpaid bills by supplier and due date.
- Check each bill against the order and the delivery. You should only owe for what you received.
- Look for duplicates: the same bill entered twice, or paid twice.
- Compare supplier statements with your records for your largest suppliers.
- Plan next month’s payments against the cash you expect.
Step 6: Payroll
- Approve and post the month’s payroll. Check that the amounts paid agree with the bank.
- Work out statutory deductions and contributions using the current rules and due dates. Rules differ by country and change over time. Use official notices and keep your rate tables up to date.
- Check for changes: new staff, leavers, pay changes and bank detail changes. Someone other than the person who made each change should approve it.
Step 7: Adjustments
Some costs belong to the month even though no bill has arrived. Ask your accountant about:
- Services received but not yet billed.
- Rent or insurance paid ahead.
- Wear on equipment (depreciation).
- Write-downs for damaged or expired stock.
Give every manual journal entry a clear description, a second person’s approval and supporting papers. Large, round-number, back-dated or self-approved entries are the first ones an auditor checks.
Step 8: Review the numbers
Run the reports and read them before you lock anything.
- Trial balance: do debits equal credits?
- Profit and loss: compare with last month and the same month last year. Which lines moved most, and do you know why?
- Balance sheet: do cash, stock, money owed to you and money you owe match your checks?
- Margins by branch and by main product group.
- Cash flow: money in, money out, closing cash.
- Tax: tax collected and tax paid, ready to file.
Ask a second person to review. Fresh eyes spot what the preparer no longer sees.
Step 9: Lock the month
Once reviewed, close the period so nobody can post into it by accident.
If you find something later, correct it in the open month with a note. Or reopen the month with approval and a recorded reason. Never change posted records quietly.
Step 10: Report and improve
Send the owner a one-page summary: results, main changes, cash, money owed and owing, and open issues.
Then spend ten minutes on what slowed the close. Next month, fix one thing.
What software can take over
Much of this is repetitive: posting sales and stock to the books, matching payments, listing overdue balances.
A system that posts every sale, purchase and payment to the books automatically removes much of that work. It also keeps closed months locked and shows corrections as visible reversals.
A note on Ziira’s own status: opening balances and some accounting choices still need an accountant’s review. Have your accountant check the set-up before you rely on it.
Ziira Intelligence also watches the books. It points out large, round, odd-hour, back-dated or self-approved manual entries, matching work that has gone stale, and unusually high expenses. These are good questions to ask before you lock a month.
The best close is a boring one. Nothing new turns up at month-end, because it was matched daily.