Month-end closing: Why it's important and how to make it work

As a business, it is important to keep track of finances and ensure that all entries have been recorded correctly. The monthly closing is one way to ensure this and that the company's finances are on track. In this article, we'll take a closer look at the monthly close, why it's important, and how to successfully complete it.

Why do you need a month-end close?

The month-end close is an important process that is performed at the end of each month to ensure that the company's finances are on track. It is an opportunity to review the company's finances and ensure that all entries have been recorded correctly. The monthly close is also an opportunity to evaluate the success of the business and identify trends over time.

Best practices for the monthly close

To ensure that the month-end close is a success, there are some best practices that businesses should follow. One is to create a detailed checklist to ensure all necessary steps are covered. Another best practice is collaboration between the departments involved, such as accounting, controlling and finance. Regular communication between departments can ensure that all steps of the month-end close are completed in a timely manner.

Month-end closing checklist

A checklist can be a useful tool to ensure that all necessary month-end closing steps are completed. Such a checklist might include the following items
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• Reviewing the accounts for possible errors or discrepancies
• Review of the balance sheet and income statement
• Review of payroll records
• Checking bank accounts and account balances
• Checking the advance return for sales tax
• Checking of open items and dunningAudit of invoices and receipts

If you want to take your month-end closing to the next level, you can of course use Finui's month-end closing module.

Who is involved in the month-end closing process?

Month-end closing is a collaboration of several departments involved in the financial management of the company. The main parties involved are usually accounting, controlling and the finance department. Each department has its own responsibilities and tasks within the month-end closing process. Close cooperation between the departments is crucial for a successful month-end closing.

What happens if there are delays?

A delayed month-end closing can lead to several problems. For one, it can make it difficult for the company to monitor and control its finances, which can lead to errors and misjudgments. Second, the company may be subject to penalties and fines if it fails to file its tax returns or other financial documents on time.

Conclusion

In summary, the monthly financial statement is an important part of a company's financial and accounting system. It provides an opportunity to get an overview of the company's financial situation and make strategic decisions based on this information. Best practices such as creating a checklist and working with an experienced tax advisor can help ensure the month-end close is completed efficiently and successfully. In addition, all employees involved should be involved in the process at an early stage to minimize potential sources of error. Last but not least, it is important to perform the month-end closing on time to avoid impending penalties and fines. With careful planning and execution, the month-end closing can be successfully managed and thus make an important contribution to the company's success.

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