Month-end financial closing checklist for small businesses

Closing the books every month — not only at year end — means you see problems while they can still be fixed. Use this checklist and aim to finish by the fifth working day.

Day 1: Cut-off

1. Record all sales invoices dated up to the last day of the month.
2. Record all supplier bills received for the month; list bills expected but not yet received.
3. Record expenses and petty cash.
4. Record payroll and statutory deductions.

Day 2: Bank and cash

1. Reconcile every bank account with the statement.
2. Reconcile credit cards and payment-gateway settlements.
3. Count cash in hand and match the cash book.

Day 3: Receivables, payables and stock

1. Review debtor ageing; follow up and provide for doubtful balances.
2. Review creditor ageing; check MSME suppliers' due dates.
3. Reconcile stock: book vs physical for key items.
4. Match advances and unadjusted receipts.

Day 4: Adjustments and taxes

1. Accrue expenses (rent, utilities, professional fees) and prepaid items.
2. Record depreciation.
3. Reconcile GST input with GSTR-2B; compute output tax.
4. Compute TDS payable and check deposits.

Day 5: Review and report

1. Check the trial balance: debits equal credits, no suspense balances.
2. Review P&L and balance sheet against last month and budget.
3. Write a short commentary: what changed and why.
4. Lock the period so nobody edits it.