A month-end close that closes

Closing a period means asserting that the numbers are final. Most closes fail not because a step was skipped but because the steps were done in an order that guaranteed rework — reconciling the bank before the last transactions were entered, or running reports before the accruals went in.

The order#

1. Stop the inflow. Fix a cut-off. Every transaction dated in the period has to be in the system before anything downstream is reliable. In practice that means chasing the last supplier invoices, the last expense claims, and anything sitting in someone's inbox.

2. Post everything routine. Sales, purchases, payroll, bank activity. The close is not the time to be entering ordinary transactions, but it is the time to notice you have not.

3. Reconcile the cash. Bank and credit-card accounts first, because almost everything else depends on them. A reconciled bank account tells you the cash side of the ledger is complete; an unreconciled one tells you nothing at all is trustworthy yet.

4. Reconcile the subledgers. Accounts receivable and accounts payable control accounts have to agree with the detail behind them. A control account that has drifted from its subledger usually means a journal was posted directly to it, which is a control failure worth finding.

5. Reconcile the tax and payroll liabilities. Sales tax collected and recoverable against the return. Each payroll liability against what was remitted. These accounts have a natural rhythm — they should return to zero or to one outstanding period — and a balance that does not fit the rhythm is the cheapest error you will ever find.

6. Post the adjustments. Accruals for costs incurred but not invoiced, prepayments spread forward, depreciation, inventory movements. This is the step that converts a cash-flavoured ledger into an accrual one.

7. Review. Compare to the prior period and to budget. Not for elegance — for anomalies. A cost that vanished, a revenue line that doubled, an account that should never have a balance and does.

8. Lock it. Prevent further posting into the period. A close that can be edited afterwards is not a close; it is a pause.

Why cash comes before adjustments#

Because an accrual is a statement about what is missing from the ledger, and you cannot know what is missing until you know what is there.

Accruing for an invoice that turns out to have been entered already creates a double count that survives into the next period, where it has to be found and reversed. Doing the reconciliations first means the accrual step is answering a question the ledger has already narrowed down.

Clearing accounts should clear#

Any account with "clearing", "suspense" or "undeposited" in its name exists to be temporarily non-zero. At close, each one should be empty, or its balance should be explainable in one sentence.

A suspense account with a growing balance is a queue of unresolved decisions. The balance is not the problem; the fact that nobody is looking at it is.

Locking, and what to do afterwards#

Once a period is closed, a mistake found later does not get fixed by editing history. It gets fixed by posting a correction in the open period — a reversal of what was wrong and a re-posting of what was right, both dated now, both visible.

That is what makes a signed-off period meaningful. If the numbers you reported in March can quietly become different numbers in June, then March was never final, and nobody downstream can rely on it.

Comma enforces this rather than requesting it: posted entries are never edited in place, a correction is a linked reversal that swaps every side exactly, and both entries stay in the ledger and net to zero. The immutable ledger post covers why that is worth the friction.

Making it repeatable#

The close is the most repeatable thing in accounting and the least often written down. A one-page sequence with the owner and the expected balance of each reconciliation turns a two-day scramble into a half-day routine — and, more usefully, means somebody else can run it when you are away.

That is also the artefact an incoming bookkeeper needs first, and the one they almost never receive.