Checklist - Monthly Close Process
Introductuion: This document should be used as a general guide to creating a monthly financial close process checklist, however, it does not address all activities that
could be assessed during this process. Controllers are encouraged to customize the checklist so that it reflects specific company practices and business operations.
AREA/TASK
GENERAL CLOSE PROCEDURES
CFO administers closing instructions on a regular basis to
appropriate departments or entities.
To ensure duplicate journal entries are not posted:
1. All journal entries made to the GL module are subject to the
signature of the Finance Team Lead.
2. All journal entries made to the GL are assigned a unique
Account Reference Number and Batch Number. Note these
numbers on the journal entry form.
The Finance Team Lead reviews the Trial Balance Report and ties
the totals to the appropriate Balance Sheet or Income Statement
Line Item.
Periodically validate that the financial system blocks a journal entry
if the journal entry does not balance.
Periodically validate that closing journal entries are blocked from
being entered into the books for previous periods. Previous periods
in the financial system should be locked to prevent changes.
RESPONSIBILITY
DATE DUE
COMPLETED
REVIEWED
CASH
Obtain bank statements for all accounts.
Perform reconciliation between bank statement and G/L for all cash
accounts.
Review outstanding checklist for any long outstanding checks.
Determine resolution/disposition.
Review all reconciling items:
1. Prepare lead schedule.
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AREA/TASK
GENERAL CLOSE PROCEDURES
2. Prepare list of bank accounts and trading securities for yearend audit confirmation process.
3. Determine if any cash is considered restricted and/or a
compensating balance for appropriate financial statement
presentation and footnote disclosure.
RESPONSIBILITY
DATE DUE
COMPLETED
REVIEWED
INVESTMENTS
Evaluate all investments for proper accounting with reference to
SFAS No. 115, and current accounting rules in regard to accounting
for equity investments. Update Controller's investment memo on a
quarterly basis. (See also, Equity Investments below.)
ACCOUNTS RECEIVABLE
ACCOUNT ANALYSIS:
Obtain detail of A/R balances by accounting personnel.
Reconcile ending A/R balance on sub-ledger to G/L.
Review all reconciling items:
1. Prepare lead schedule.
ROLL-FORWARD OF ACCOUNT:
Prepare roll-forward of A/R activity.
COLLECTIBILITY REVIEW:
Create an aged A/R detail. Show A/R in following buckets: 0-30
days, 31-60 days, 61-90 days, and 91+ days. Review long
outstanding balances.
Perform collectibility review of all A/R balances through discussion
with relevant parties. Document results of discussion. Determine if
any balances require reserves.
ALLOWANCE FOR BAD DEBTS:
Prepare account analysis showing bad debt allowance.
Prepare roll-forward of Allowance for Bad Debts account.
Tie beginning balance to G/L and to prior-period financial statement.
Tie Bad Debt Expense to Income Statement.
Tie write-offs to actual write-offs recorded during the period.
Tie ending balance to G/L.
PREPAID EXPENSES
Obtain supporting documentation for all additions to Prepaid Assets
during the period.
Ensure amounts are properly classified as Prepaid Assets.
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AREA/TASK
GENERAL CLOSE PROCEDURES
RESPONSIBILITY
DATE DUE
COMPLETED
REVIEWED
Prepare account analysis/reconciliation of Prepaid Assets account.
Review all reconciling items (if any):
1. Review all asset items for proper classification of short-term vs.
long-term.
OTHER CURRENT ASSETS
Prepare account analysis of Other Current Assets account.
Prepare roll-forward of Other Current Assets activity.
Review all reconciling items (if any):
Review all asset items for proper classification of short-term vs. longterm.
FIXED ASSETS
ADDITIONS:
Review new Fixed Asset purchases during period. Obtain related
invoices. Ensure invoices have been approved by the responsible
budget holder.
Journal entries related to Fixed Asset additions are approved by the
Finance Team Leader and are supported by appropriate detailed
documentation.
Tie additions in roll-forward to detail of purchases during period.
Ensure all items added to Fixed Assets are properly capitalized.
Tie non-cash acquisitions to Capital Lease or other area(s).
DISPOSALS:
Journal entries related to Fixed Asset disposals are approved by the
Finance Team Leader and are supported by appropriate detailed
documentation.
Tie disposals in roll-forward to detail of assets disposed of during
period.
Ensure journal entries were recorded correctly to remove asset and
accumulated depreciation.
Determine gain or loss recognized on disposals.
ACCOUNT ANALYSIS:
Update roll-forward of Fixed Asset by category.
Agree to fixed assets sub-ledger .
FOOTNOTE DISCLOSURE:
Prepare footnote disclosure to show asset classes and related
balances.
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AREA/TASK
GENERAL CLOSE PROCEDURES
RESPONSIBILITY
DATE DUE
COMPLETED
REVIEWED
ACCUMULATED DEPRECIATION AND AMORTIZATION
ACCOUNT ANALYSIS:
Perform monthly calculation of depreciation expense. Book related
entries.
Prepare roll-forward of accumulated depreciation and amortization
accounts.
ASSETS UNDER CAPITAL LEASE:
Ensure that assets under Capital Lease are being amortized
appropriately.
FOOTNOTE DISCLOSURE:
Prepare footnote disclosure to show accumulated depreciation
balances as of period-end as well as current period depreciation
expense.
OTHER ASSETS
Prepare reconciliation of Other Assets account.
Review all reconciling items (if any):
1. Review all asset items for proper classification of short-term vs.
long-term.
GOODWILL
SFAS No. 142 ANALYSIS:
Perform annual (or more frequent, if necessary) assessment for
impairment.
ACCOUNT ANALYSIS:
Discuss with management as to any changes in Goodwill during
period.
Prepare roll-forward of Goodwill account activity.
Obtain supporting documentation for changes to Goodwill during the
period.
Prepare lead schedule.
INTANGIBLE ASSETS
SFAS No. 141 ANALYSIS:
Perform quarterly assessment for impairment.
ACCOUNT ANALYSIS:
Prepare roll-forward of Intangible Asset account activity.
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AREA/TASK
GENERAL CLOSE PROCEDURES
Obtain supporting documentation for changes to Intangible Assets
during the period.
Prepare lead schedule.
AMORTIZATION:
Perform monthly calculation of amortization expense. Book related
entries.
RESPONSIBILITY
DATE DUE
COMPLETED
REVIEWED
ACCOUNTS PAYABLE
CUTOFF:
Perform A/P cutoff—Three days before period-end.
ACCOUNT ANALYSIS:
Obtain A/P sub-ledger detail.
Reconcile A/P sub-ledger to G/L.
ACCRUED EXPENSES
CUTOFF:
Contact relevant process owners to request information regarding
required period-end accruals.
Contact vendors for outstanding/unbilled amounts as of periodend—External Auditors, Legal, Consultants, Recruiting firms, etc.
ACCOUNT ANALYSIS:
Prepare reconciliation of Accrued Expenses accounts. Prepare subreconciliations as necessary.
Document all reconciling items.
Review all liability items for proper classification of short-term vs.
long-term.
CAPITAL LEASE OBLIGATION
SFAS No. 13 ANALYSIS:
Obtain copies of all new leases entered into during period.
Perform analysis using SFAS No. 13 criteria.
Ensure leases are properly accounted for under SFAS No. 13 capital vs. operating.
ACCOUNT ANALYSIS:
Prepare and record journal entries to properly reflect cap lease
activity.
Update roll-forward schedule of Capital Lease Obligation liability.
Ensure that obligations recorded relate to assets still under
ownership.
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AREA/TASK
GENERAL CLOSE PROCEDURES
Determine proper classification of Capital Lease Obligation as shortterm vs. long-term.
Prepare lead schedule.
FOOTNOTE DISCLOSURE:
Prepare footnote disclosure for future commitments.
RESPONSIBILITY
DATE DUE
COMPLETED
REVIEWED
OTHER CURRENT LIABILITIES
Prepare roll-forward of Other Current Liabilities activity.
Review all reconciling items (if any):
1. Review all items for proper classification of short-term vs. longterm.
EQUITY
Prepare roll-forward of Equity accounts:
1. Tie Net Income in Retained Earnings roll-forward to Income
Statement.
2. Obtain support for all changes in Equity accounts.
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