The Month-End Close: What Should Happen Every Month

Entering transactions is not the same as closing the books. A close is the review at the end of each month that says: these numbers are final, they tie to the bank, and nothing about that month will change without a good reason. Without it, books drift, and the profit and loss for a month you already looked at can quietly be different the next time you open it.

What a real close includes

1. Every bank and card account is reconciled. The QuickBooks balance matches the statement balance at month-end, with a difference of exactly $0.00.
2. Uncategorized balances are cleared. Uncategorized income and expense and any "ask my accountant" balance are at zero, or the items still open are listed by name.
3. Bills and invoices are reviewed. Payables and receivables are up to date, and anything more than 60 days overdue is flagged.
4. Opening balances have not moved. The month starts with the same balances the previous month ended with, which shows no one edited a finished month.
5. The period is locked. Nobody, including you, can change the month by accident.
6. Someone tells you what happened. A short summary of what was closed, what is still open and what needs your attention.

Why locking the month matters

QuickBooks Online lets you set a closing date, found in the accounting settings under "Close the books". Once set, changes to earlier dates are blocked or require a password. That protects the reports you have already given to a lender, an investor or your CPA. If an old month can be edited freely, a well-meaning cleanup in March can change the numbers you handed over in January.

If something in a closed month really does need to be corrected, the right way is to unlock it deliberately, fix it, write down what changed and why, and lock it again.

When should the close happen?

For an owner-run business, a good target is about ten days after month-end. That leaves time to receive the statements, categorize, reconcile and review, without the month going stale.

The trap is waiting for missing information. If a receipt or an answer has not arrived by the time the close is due, do not leave the month open. Close it, put the open items in a clearly labeled holding account, and list them in the summary so they can be cleared when the answer arrives. A month that stays open for weeks is a month that never closes.

Signs your books are not really being closed

• The last reconciliation date on your bank accounts is months ago.
• The profit and loss for last month is different each time you run it.
• Nobody can tell you the date the books were last final.
• There is no closing date set in QuickBooks.
• You are surprised by numbers at year-end or when you apply for a loan.

A ten-minute check

1. In QuickBooks, open the Reconcile page for each bank and credit card account and note the date of the last statement reconciled.
2. Run last month's Profit and Loss today, and again in a week. If the numbers change, the month is not closed.
3. Check the accounting settings to see whether a closing date is set.
4. Look at the uncategorized balance for last month.

If your close is done, all four checks come back clean. If not, you know where to start.

How this works with Onavani

In our monthly bookkeeping, we reconcile every account, clear the uncategorized items, review payables and receivables, and close and lock the month, aiming for about the tenth. You then get a short summary of what was closed, what is still open and what we need from you.