How to use this checklist: Run through this list every month-end. The sections follow the logical sequence of a close — start with bank reconciliations, work through revenue and people costs, then accruals, and finish with reporting and sign-off. The target is a clean, signed-off management accounts pack distributed within 10 working days of month-end.
1. Bank & Cash Reconciliations
- All bank accounts reconciled to statement balance — zero unreconciled itemsEvery account reconciled to the closing bank statement. Unreconciled items should be nil by the end of the close window — not "mostly done".
- Petty cash and company card statements processed and postedAll employee expense claims and corporate card transactions coded and posted. Cards should be reconciled to statements with receipts matched.
- Intercompany balances reconciled and confirmed with counterpart entitiesIf there are group entities, intercompany balances must agree. Disagreements between entities are a common audit finding and cause management accounts to misstate group position.
- Restricted cash separately identified and disclosedSafeguarded funds (for EMI/payment firms), security deposits, and escrow amounts should be separately classified on the balance sheet — not included in freely available cash.
- FX balances revalued to closing rate — P&L and balance sheet impact postedAll foreign currency balances revalued using the month-end closing rate. The FX gain or loss posted to the P&L. Balance sheet balances updated accordingly.
- Sweep accounts and overnight deposits confirmed and reflectedAny cash in money market accounts, sweep facilities, or overnight deposits confirmed and included in the cash balance and cash flow statement.
2. Revenue & Deferred Revenue
- Revenue recognition reviewed: IFRS 15 / FRS 102 applied correctlyRevenue recognised only when performance obligations are satisfied. For subscription businesses, this means the service period — not the invoice date or cash receipt date.
- Deferred revenue schedule updated — new bookings added, recognised amounts reversedThe deferred revenue balance on the balance sheet should be explainable from the deferred revenue schedule. New cash received in advance added; amounts earned in the month released.
- Accrued revenue (work performed, not yet invoiced) calculated and postedFor any revenue earned but not yet invoiced — milestone billing arrangements, professional services in progress — an accrued revenue asset should be recognised.
- Contract modifications or cancellations processed in the periodUpsells, downgrades, mid-period cancellations, and contract extensions all affect deferred revenue, MRR, and NRR calculations. Process in the month they occur.
- Refunds and credit notes matched against original invoicesRefunds and credits posted and matched to the originating invoice in the accounts receivable ledger. Do not net against current month revenue without disclosure.
- Revenue by product line and geography extracted for management accountsManagement accounts should show revenue segmented by product line and, where relevant, by geography. Blended figures alone are insufficient for variance analysis.
3. Payroll & People Costs
- Payroll journal posted: gross pay, employer NI, pension, net payFull payroll journal: gross salaries, employer National Insurance, employer pension contributions, and net pay to employees. Employee NI and PAYE to the PAYE liability account.
- PAYE liability confirmed against HMRC payroll portalThe PAYE/NIC liability on the balance sheet should match the amount due to HMRC per the portal. Reconcile monthly — discrepancies compound quickly and attract penalties.
- Accrued salaries for any employees paid in arrearsIf any staff are paid in arrears or the payroll cut-off does not align with month-end, accrue the outstanding payroll cost to match the period it relates to.
- Commission and variable pay accruals calculated and postedSales commission, performance bonuses, and other variable pay accrued in the period earned — even if not paid until the following month. Tie to the commission calculation schedule.
- Contractor invoices processed and IR35 status confirmedAll contractor invoices posted. IR35 determination recorded for each contractor. Off-payroll rules mean misclassification is both a tax risk and a PAYE liability risk.
4. Accruals, Prepayments & Provisions
- Accruals schedule reviewed: all known liabilities accrued even without invoiceAccrue for costs incurred but not yet invoiced — legal fees, audit fees, software licences, cloud costs. The absence of an invoice is not a reason to omit a cost from the period.
- Prepayments schedule updated: monthly amortisation postedPrepaid insurance, annual software licences, and other prepaid costs amortised over their benefit period. The prepayments balance should reduce by the monthly amortisation amount.
- Lease liability and right-of-use asset movements posted (IFRS 16)Monthly interest on lease liability, lease payments reducing the liability, and right-of-use asset depreciation all posted. Balance sheet balances tie to the IFRS 16 amortisation schedule.
- Depreciation and amortisation run for all fixed assetsMonthly depreciation charged on all tangible assets; amortisation on intangibles (capitalised software, IP). Charges tie to the fixed asset register.
- Bad debt provision reviewed and updated against aged debtorsReview debtors over 60 days. Increase or release the bad debt provision based on specific recoverability assessment. Do not carry uncollectable balances at full value.
- Tax provisions updated: corporation tax, VAT, any withholding tax positionsCorporation tax provision updated based on year-to-date taxable profit. VAT liability confirmed against the VAT return or pro-rated accrual. Withholding tax positions reviewed for cross-border payments.
5. Reporting Pack Preparation
- Trial balance reviewed: no unexpected balances or signsReview every balance on the trial balance before running reports. Debit balances on liability accounts or credit balances on expense accounts are red flags that need to be investigated.
- P&L vs budget variance analysis prepared with commentaryMonth and year-to-date actuals vs budget for all material line items. Variance commentary written in plain English — "what happened and why" — not accounting jargon.
- Balance sheet reviewed: all balances explained and tying to supporting schedulesEvery material balance sheet item should tie back to a supporting schedule: bank recs, AR aging, deferred revenue schedule, fixed asset register, accruals schedule.
- Cash flow statement prepared: operating, investing, financing activitiesA proper cash flow statement — ideally prepared under the indirect method. Cash from operations must reconcile from net profit through working capital movements.
- Headcount report: starters, leavers, current FTE vs planTotal headcount by department, starters and leavers in the month, open roles against the headcount plan. Cost per head calculated and tracked.
- KPI dashboard updated: ARR, MRR, churn, NRR, burn, runwayAll operational KPIs updated to current month-end. Burn and runway figures calculated using latest cash balance and forward net burn. Trend charts updated.
6. Sign-Off & Distribution
- Finance lead reviews and approves all journals before postingAll manual journals reviewed and approved by the finance lead before posting. Journal descriptions must be sufficient for an auditor to understand the purpose without asking.
- CFO or finance director reviews trial balance before reports distributedA second-level review of the trial balance before management accounts are finalised. The CFO should be able to explain every material balance without referring to detailed workings.
- Management accounts distributed within agreed SLA (target: day 10)Management accounts sent to the agreed distribution list — board, investors, CEO — within 10 working days. Late accounts undermine board confidence in financial control.
- Board pack narrative reviewed for consistency with financial dataAny written narrative in the board pack cross-referenced against the financial data. Revenue figures in narrative commentary must match the P&L; runway figures must match the cash model.
- Aged debtors and creditors circulated to relevant team leadsAged debtors shared with sales / account management; aged creditors shared with relevant budget holders. Finance cannot chase debtors or approve payments without operational input.
- Month-end close log updated with any issues flagged for next monthAny unresolved items, known data quality issues, or items that required workarounds documented in the close log. Carry them forward so they are not forgotten next cycle.
