Get Into That Routine

Aaron Apathy, CPA lays out the best routine for a useful month-end closing process:


You may have heard the saying, “If you don’t know your numbers, you don’t know your business.”

It’s true. But how do you get into a routine of checking your numbers? The best way for a business owner to understand their businesses is by receiving financial reporting. It is essential that owners receive this information in a timely manner so that they can review and make sound business decisions based on these numbers.  To improve efficiency and timely reporting, every business should have a systematic monthly financial close process- a routine.

Here are some quick tidbits to establishing a sound financial close:

  1. Establish a deadline. Always defer to the deadline and don’t miss it.
  2. Create a checklist of items to be completed in this process. Understand who in your organization is completing which tasks, what their specific responsibilities are and when each task is due. Examples include:
    • Reconcile bank account(s)
    • Reconcile loan account(s)
    • Record monthly journal entries
    • Tie-out payroll
    • Perform variance analyses
  3. Determine appropriate review procedures to ensure that the tasks above are completed on time and correctly. Communicate who is to perform the review and how it is to be done.
  4. Develop a retention policy to aid in the preparation of year-end tax returns and financial statements, but that does not impede the process.
  5. Review periodic internal financial statements routinely. Once you’re certain the steps above have been done, your review of your internal financials will indicate trends related to your business and not to incomplete bookkeeping tasks.

Every business is different, and a monthly financial close process should be unique to your business.  However, it is an important process to have as a part of your monthly routine and helps the business owner to “know their numbers.”