Month-End Close
Ask an accounting team what eats their evenings and the answer is usually the close, mostly because the process lives in one person's head. This month-end close SOP lays out the full sequence, from subledger cutoffs through reconciliations, accruals, and variance review, to a controller sign-off and period lock.
Two checkpoints keep the close honest: unresolved reconciling items loop back into investigation before accruals post, and variances outside threshold are explained by their owners before the controller reviews. Nothing locks until the numbers are defensible.
Import this template into Essoflo to set your close calendar, attach reconciliation checklists to each step, and assign preparers and reviewers, so the close no longer depends on anyone's memory.
- Purpose
- Produce accurate, reviewed financial statements on a predictable monthly timeline.
- Scope
- Applies to the monthly accounting close for all entities and ledgers.
- Steps
- 10 steps & decisions
- Roles & tools
- Staff Accountant, ControllerERP / GL System, Reconciliation Tool
Step-by-step walkthrough
The same procedure as the diagram above, in reading order — decisions show where each answer leads.
- 1
Complete AP / AR subledger cutoffs
Post final invoices and receipts; close the subledgers to new activity.
Who: Staff Accountant·Tools: ERP / GL System
- 2
Reconcile bank & balance sheet accounts
Reconcile cash, prepaids, fixed assets, and accrual accounts to support.
Who: Staff Accountant·Tools: Reconciliation Tool
- 3
Reconciling items resolved?
Every unexplained difference is investigated before the close proceeds.
True → Post accruals, prepaids & depreciation·False → Investigate & post adjusting entries
Who: Staff Accountant
- 4
Investigate & post adjusting entries
Chase down differences and post corrections with support attached.
Who: Staff Accountant·Tools: ERP / GL System
- 5
Post accruals, prepaids & depreciation
Book recurring and estimate-based entries for the period.
Who: Staff Accountant·Tools: ERP / GL System
- 6
Run preliminary financial statements
Generate the P&L, balance sheet, and cash flow for review.
Who: Staff Accountant·Tools: ERP / GL System
- 7
Variances within threshold?
Compare to budget and prior period; flag lines outside tolerance.
True → Controller approves close?·False → Investigate variances with owners
Who: Controller
- 8
Investigate variances with owners
Budget owners explain or correct flagged variances.
Who: Staff Accountant
- 9
Controller approves close?
Final review of statements, reconciliations, and open items.
True → Lock the period & distribute reports·False → Investigate variances with owners
Who: Controller
- 10
Lock the period & distribute reports
Lock the GL and send the reporting package to stakeholders.
Who: Controller·Tools: ERP / GL System
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