Purpose of Month-End Closing

The main purpose of month-end closing is:

 To provide a cut-off point on which to report on the financial position

of the company. This is essential for accurate management reporting.
 To ensure transactions/invoices are processed in the correct GL and in
the correct period.
 To prevent back-dated posting of transactions by closing off earlier
periods so previous reported financial information is not affected.
 To improve efficiency by timely and routinely completing pre-planned
activities to a set timetable.
 To help with the preparation of company’s year-end accounts.
 To help improve Company’s financial position by:
o allowing good quality management information to be produced
for better decision-making;
o for collecting debts from customers more quickly; and
o banking receipts more promptly
Month-end Timetable
The closing dates for each group/process are as follows:
Process/Group Working Day 3 Working Day 4 Working Day 5 Working Day 6
Accounts Receivable
Q2C / Quote to Cash √

Accounts Payable
P2P / Procure to Pay √

Inventory
√
Project Advance
√
WIP to COS
√
General Ledger
√
Accruals/Provisions
√
Fixed Assets
A2R / Acquire to Retire √

Overall Review
√
Reporting
√
Overview of Each Process
Process/Group Last Working day of Working Working Working Working
each month Day 3 Day 4 Day 5 Day 6
- Check Open SO for any left billing
- Check all WCC/FCC PAC/FAC in a
month are billed/Invoiced
- Check for bank collections which are
Accounts Receivable
not posted
Q2C / Quote to Cash
- Check for unreconciled /unapplied
collections
- Check for any unposted Credit
Notes/Sales Return

- Check Open PO for any vendor

invoices not received
- Ensure all vendor bills are posted in
SAP
- Check all WCC/FCC PAC/FAC in a
month for which vendors need to
invoice REIME
Accounts Payable - Check for bank payments which are
P2P / Procure to Pay not posted in SAP
- Check for unreconciled /unapplied
payments
- Check for any unposted Debit
Notes/Purchase Return
- Reconcile each vendor’s statement
to the corresponding accounts
payable balance in SAP

- Match Physical Count of Stock with

Inventory SAP Stock
-

Project Advance

WIP to COS

- Reconcile any other asset or liability accounts you are tracking

outside of SAP (e.g. Prepaid expenses, Accrued expenses,
General Ledger Deferred rent, etc.)
Accruals/Provisions - Ensure all Inter-company transactions are posted in SAP and
tallied with other entities
- Ensure all ROE are posted on all Foreign denominated ledgers
-
 Fixed Assets
A2R / Acquire to
Retire

Overall Review and - Close the period in SAP. Do not skip this step. It means no more transactions
close the period (like vendor bills, customer invoices, etc.) can accidentally be posted to the
closed period without at least some sort of warning.
Reporting and - Distribute the financial statements or MAR
distribution

MONTH END CLOSING CHECKLIST

Complete AR Process

- Ensure all WCC/PCC/FCC are submitted to Accounts Dept for billing

- Ensure all Retention Invoices are billed and booked
- Ensure all Credit Notes are approved, billed and booked
- Ensure all Customers Credits are applied to Bills Outstanding

Complete AP Process

Journal Entries and Adjustments

Reconciliations

Variance Analysis

MAR/DFS Preparation

Financial Review