Mastering Month-End Close: Key Considerations for Finance Teams

Pete Archer

Founder / CEO

Although the month-end close process occurs every month in every company around the world, no two month-end close processes are the same. While each company has the same objectives, the exact requirements, timelines, and tasks will vary. However, there are several themes that are universally shared by all companies, and if followed, will make your month-end close that much easier. So, let's dive into some of the key considerations that can help your team run a smooth month-end process.

Understand Your Deadlines

The first and arguably most important consideration is to know what deadlines your team has. It may seem like I am stating the obvious, but it is essential not to overlook it. First, determine whether your monthly deadlines are ‘hard deadlines’ that are immovable, or whether they are more flexible. For example, is there a board meeting that requires a monthly finance report, or is the month-end information not required on any fixed date? There's no point in giving yourself and the team unnecessary stress by working towards a self-imposed deadline that only you and your team care about. So ensure you understand the deadline and allocate your tasks accordingly.

Once the deadline is established, consider what actually needs to be performed prior to this deadline. For example, if the major deadline is producing and presenting a monthly finance report, then items such as chasing outstanding debtors or reconciling the next month's AP bills can be pushed back until after the finance report is completed. I am not advocating for tasks to be ignored, but strategically pushing them back can save you and your team time during crucial moments.

Work Allocation and Rotation

This is always a contentious topic when it comes to managing a finance team, as some finance teams prefer to have each team member perform the same tasks each month, believing that the person will ‘own’ the process and perform it most efficiently. However, this approach can lead to long-term problems for the team. Another team member looking at the process with fresh eyes can drive process improvement and ensure that key knowledge is not centralised in individual people but shared around the team.

There should always be some level of task rotation and training in the teams' responsibilities. Even if the rotation occurs only twice a year, it ensures that knowledge is spread across your team, preventing key person risk. Furthermore, work rotation can serve as a great test for your team's procedure documents, which are essential tools in ensuring a smooth month-end process.

Pre vs. Post Month-End Tasks

One of the most important considerations is when you can actually do all your month-end close processes. Some tasks may not be able to be started until work day one due to the inputs needed. However, if too many tasks in your month-end close process take place after month-end, it can lead to periods of high stress and then periods of time where your team is idle mid-month. A smooth process is one where tasks are distributed so that as much as possible is done prior to the actual end of the month.

Sometimes to push a task to pre-month end can take a bit of creative thinking. For example, if a task can be 80% completed before month-end, consider splitting it into two separate tasks: one pre-month-end and one post-month-end. By doing so, you are pushing the majority of the work associated with the task to a period when your team is quieter, meaning you can reduce the workload at your team's busy times.

Accruals vs. Actuals

Although it goes against a lot of our nature as accountants, sometimes close enough must be good enough. We love exact amounts; however, there are situations where you can't afford to let the whole close process come to a standstill due to one piece of information not having been received. Remember, the goal is to meet your deadlines effectively. If your timelines are tight, certain items are going to have to be estimated rather than waiting for exact figures.

Timing of Balance Sheet Reconciliations

Balance sheet reconciliations play a crucial role in ensuring the accuracy of financial records. They will inevitably throw up small variance that needs to be fixed; however, few finance teams have the luxury of time or resources to complete full balance sheet reconciliations prior to closing the ledger. A middle ground needs to be found that will give your team comfort that material balance sheet accounts are correct, while also utilising the teams time effectively. Think of this as a "balance sheet rec-lite" approach – a quick check before month-end of the most important balance sheet accounts. This preliminary review helps identify any potential embarrassing errors that do need to be corrected pre-month end. Remember, it doesn't have to be a full-blown reconciliation; it's about catching any red flags early and making the necessary tweaks.

Automation and Technology

Any advantage software can give your team at month-end must be utilised. The time savings can be significant, and a finance team should not just have software that makes their processes more efficient, but the team also needs to look at how they handle their workflow and task allocation. Excel is a great tool for general data manipulation, but it is not a workflow management tool.

While the above items are just a few areas that every finance manager should be aware of when planning their month-end close, it's important to remember that no two finance teams or companies are exactly alike. Adapt these considerations to fit your unique circumstances, and always strive for continuous improvement.

If you would like to know more about specialised workflow software designated specifically for finance teams, then reach out to us at or sign up for a free trial.

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