A short close gives leaders current numbers and lowers rework. It also builds trust in reports because the process is clear and repeatable. The goal is not speed for its own sake. The goal is a routine that produces accurate statements with a small, steady effort every month.
The cadence has three parts. The close takes five business days. Work runs in three streams: accounts payable, accounts receivable, and reconciliations. There are two reviews: a controller review on Day 4 and a leadership review on Day 5. This pattern sets focus, reduces task switching, and keeps handoffs clean.
Name one owner for each stream. The AP owner manages bills, approvals, accruals, and payment cutoffs. The AR owner manages invoicing, receipts, credits, and reserves. The reconciliations owner manages bank, merchant processors, payroll, fixed assets, and other balance sheet tie-outs. The controller signs the package and owns policies. FP&A prepares the variance page and refreshes the forecast after numbers are final.
Publish a one-page calendar with dates for billing locks, usage locks, bill intake stops, payment runs, and review meetings. Set a time of day for each cutoff. Use the same times every month so teams know what to expect.
Use one general ledger as the source of truth. Connect subledgers for AR, AP, revenue, and fixed assets where needed. Keep shared codes for entity, department, customer, vendor, and product. Shared codes make reports match without manual steps.
The day before month end, confirm that bank feeds are current, that merchant downloads are set, and that price lists and tax settings are locked. Send a reminder for timesheets, expense claims, and open approvals. List known large items due early next month so accruals are easy to post.
Reconcile all bank accounts to statements or feeds. Post interest, fees, and FX. List any reconciling items that remain with a date and a plan to clear. The ending cash in the ledger must match the bank after this step.
Download gateway and marketplace settlements for the period. Tie gross sales, discounts, fees, refunds, and net payouts. Post entries that split these lines into the right accounts. This step prevents net deposits from hiding fees or discounts.
Apply customer payments to open invoices. For unidentified receipts, place them in a clearing account and open a same-day inquiry. Keep the clearing list short and dated so items do not linger.
Confirm all invoices for the period are issued. If your model includes usage, export usage as of the cutoff and lock it. Do not backdate new usage after this point. Late usage will post next month.
Post revenue from the subledger or from schedules. For SaaS, recognize time-based access over the service period and usage when it occurs. For projects, post milestones or percent-complete as policy requires. Update deferred revenue and produce a rollforward that shows opening, additions, releases, and ending balance.
Record approved credits with a link to the cause. Review the AR aging. Propose bad debt reserves for long-aged items using your policy. Keep notes on key accounts so the rationale is clear next month.
Collect all bills received through the cutoff. Confirm approvals. Code to the right departments and projects. For missing bills where services are known and material, post accruals based on contracts or purchase orders. Record the date and method used for each accrual.
Import payroll journals for the period. Accrue variable pay when earned but unpaid. Tie payroll tax liabilities to provider reports. Limit access to detailed payroll data and store support in a secure folder.
Update prepaid, deferred cost, and other repeating schedules. Post amortization entries. These small schedules remove manual work next month and keep matching consistent.
Reconcile every balance sheet account to source detail. Bank ties to statements. AR ties to the subledger and to the aging. AP ties to the subledger and to the vendor list. Deferred revenue ties to the revenue subledger. Fixed assets tie to the asset register. Sales tax or VAT payable ties to returns in progress. Attach evidence or a file path for each recon.
Prepare preliminary statements. Compare to last month and to budget. Write short notes for large movements. State the driver and the amount. Keep notes near the numbers they explain. This makes the review fast.
The controller reads the recons and the flux notes. Open items are either fixed, accrued, or documented with a plan to clear next month if immaterial. After this step, numbers should change only for a clear error.
FP&A refreshes the dashboard and the forecast with final actuals. A one-page summary highlights revenue, gross margin, operating expense, cash movement, and runway. The summary states three actions for the next month.
Publish the P&L, balance sheet, cash flow, a deferred revenue rollforward if relevant, an AR aging, and an AP aging. Include the variance page and a short management summary. Archive journals, reconciliations, exports, and screenshots in a dated folder with the same structure every month.
Intake runs through one channel only. Bills arrive in the AP tool or to a single email. The tool captures vendor, date, amount, tax, and terms. Approvals follow a simple matrix based on amount and department. Payment runs are scheduled and match approved bills only. Changes to vendor bank details require maker and checker with independent verification. At close, the AP owner posts accruals for services received but not billed and clears them next month when bills arrive.
Invoices follow a standard template with item, tax, and due date shown. Credit memos are approved by the AR owner and reference the original invoice. Collections follow a timed plan: reminder before due date, a notice at due date, and a firm follow-up after a set number of days. Cash application uses remittance data first. Short pays are resolved by a set rule that involves sales or support when needed. The reserve policy applies the same method each month.
Each recon uses a common template with beginning balance, additions, reductions, and ending balance. Evidence sits beside the recon in a folder. Reconciling items list a date, an owner, and a plan. Items older than 30 days require a comment by the owner and the controller. This keeps the list short and the balance sheet clean.
Use role-based access for the ledger and subledgers. The person who sets up a vendor cannot approve payments. The person who posts a journal cannot approve it. Keep approval paths visible and test them once a quarter.
Log changes to the chart of accounts, revenue rules, tax settings, and key reports. Each change record includes the date, the reason, and the person who approved it. Store these logs with the close evidence so auditors can review them in one place.
Every manual journal includes a short memo that states the purpose, method, and source. Screenshots include dates and totals. Exports include filter settings. File names follow a standard: year, month, account, and a short description. Clean names save time.
Offshore preparers post cash, bills, invoices, and routine journals on Days 1 through 3. Offshore reviewers prepare reconciliations and first variance notes on Day 4. Onshore controllers review and approve on Day 4 and Day 5. This split keeps judgment onshore and moves repeatable tasks offshore.
Hold a short daily stand-up during the close. Use one tracker with task, owner, due date, and status. Questions stay in the tracker so decisions are easy to find next month. Keep file paths in the tracker so evidence is one click away.
Measure days from period end to package publish. The target is five. Track the average and the worst case.
Measure the share of checklist items completed by their target day. Aim for at least nine in ten.
Count reconciling items older than 30 days. The target is zero or a small number with explanations.
Track the number and size of post-close entries. A low count shows that reviews worked.
When usage or settlements arrive late, accrue based on a clear method and reverse next month. Record the method in the journal memo.
If you see net deposits in revenue, fix the entry to show sales, fees, and refunds separately. Then update the intake rule so it does not happen again.
If known services are unbilled, accrue them based on contracts or prior months. Tag the accrual with vendor and service so it clears fast.
If sales adjusts terms mid-month and accounting does not see it, schedules break. Add a simple change form that routes to accounting the same day. Lock a time for changes that will apply to the period.
Keep a runbook with the calendar, owners, SOPs, and templates. New staff can follow the runbook without long calls. Update it after each retro.
Assign backups for each stream. Once a quarter, run a switch day where backups perform the tasks under review. This reduces risk during vacations or exits.
A five-day close is possible with a clear cadence and simple rules. Use the 5-3-2 pattern to focus work, limit changes after cutoff, and keep reviews short. Give each stream an owner. Write SOPs that explain the path from source to ledger to report. Keep evidence close to entries and keep approvals clear. With this structure, your monthly close becomes a reliable routine that the team can run without stress and that leaders can trust every time.
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