Month-end close checklist for businesses on QuickBooks Online

A month-end close is the routine that turns a month of transactions into statements you can rely on. The steps below follow the order we use for businesses on QuickBooks Online. The same logic applies to Xero, Zoho Books or Tally.

1. Make sure all transactions are in

• All sales invoices for the month are raised.
• All supplier bills received for the month are entered.
• Bank feeds are connected and every transaction in the “For review” list has been categorised or matched.
• Expense claims and card receipts are uploaded and posted.

2. Reconcile every account

Reconcile each bank account, credit card, payment gateway and loan account to its statement as at the last day of the month, using the Reconcile tool. The reconciled balance in QuickBooks must equal the statement balance. Investigate and clear old uncleared items rather than carrying them forward month after month.

3. Review receivables and payables

Run the Accounts Receivable and Accounts Payable ageing reports. Check that credit notes and payments have been applied to the right invoices, follow up overdue amounts, and confirm that supplier balances match their statements.

4. Record month-end adjustments

• Accruals for costs incurred but not yet billed, such as utilities or professional fees.
• Prepayments for costs paid in advance, released to expense month by month.
• Depreciation on fixed assets.
• Loan interest and the split of instalments between interest and principal.
• Payroll journals, including employer contributions and statutory deductions.
• Deferred revenue for income received before it is earned.

5. Review the reports

Run the balance sheet and profit and loss and read them line by line. Look for negative balances that should not exist, unusual movements against last month, and anything sitting in suspense or “uncategorised” accounts. Compare the result with budget if you have one.

If a number surprises you, investigate it before you send the report, not after.

6. Lock the period

In QuickBooks Online, set a closing date under Account and Settings, Advanced, Accounting, Close the books, with a password. This prevents changes to a month that has already been reported.

7. Send the pack

Share the balance sheet, profit and loss, cash position and a short note on anything unusual or still open. A consistent pack, delivered on the same day every month, is what makes the numbers useful for decisions.