A close is not a report. It is a set of checks that make the numbers safe to rely on. Skip one and the error does not vanish; it moves into next month, where it is harder to find.
The bank balance matches the bank
The ledger balance on the last day of the month must equal the statement balance, to the cent.1 A difference is almost always a transaction entered twice or one dated into the wrong month.
Every deposit has a source
Money in that is not matched to an invoice or a sale is held in a suspense line, never guessed at. The suspense line is the first thing we read each month.
Card feeds are complete
Feeds drop days. We compare the count of lines per week with the last month and look for gaps over two days.
The big movers are explained
Any line that moved by more than twenty percent against the three-month average gets a sentence of explanation, even if the answer is "annual insurance fell due".
Nothing is left half-done
Open items are listed with an owner and a date. A close with ten open items and names beside them is better than one with none and no record.
You can run these five checks yourself on any spreadsheet ledger. They need only the statement and the ledger side by side.
- If the statement runs through the 31st but posts on the 2nd, compare with the transactions dated on or before the last day. Back