Having a checklist is a solid control in any process, and is no different here. I mean, if you desire your financial statements to be accurate, one thing you must have is a Closing Checklist to ensure nothing is forgotten. Don’t rely on your memory. Besides, if something were to happen to the one closing the books, then, well you know…
I’m going to share a checklist format I use that I’ve found useful to me over the years. Download it here. [download id=”351″ template=”Closing Checklist”]
It’s broken down between those items that can be done before period end, (speeds up the process the week of close) and those after period end. It’s based on a 5 day closing cycle. Yours may be shorter or longer depending on what all you do. But, I’d say you should be issuing Financial Statements by day 5 at the latest.
Here’s how I use the checklist:
File # – To the extent I use a supporting file for the task or journal entry, I use a number/name file system. This file system allows you to keep the files in order by number. The numbering system I use ties into the Lead Sheet. (Useful for providing supporting docs to CPA Firm).
JE# – This is stating the obvious here, but I do keep all my journal entries in one Excel file with a tab for each entry. They’re always the same entry # each month (I just have a suffix for month and year). This eliminates the need to assign entry numbers and keeping a log of the entries in a separate location. I color code the tab when the entry is entered in system.
Status – As items are completed, I put an “X” in this field so I can easily see what’s done and what remains open.
Description – Simply a short description of the task.
Notes – An area to record additional notes concerning the task if desired/needed.
You may want to arrange things by day based upon the day the information is available. Obviously, things must be arranged in some logical manner as certain entries are based upon other things, such as contributions being posted, accounts payable being closed out, etc.
The main point of the post is to have a checklist, not so much how it’s laid out. However, there are some critical components it must have (after all transactions have been entered):
A Transaction Review Component. Review all transactions posted to the General Ledger for example. Never assume all things are posted to the correct place and that everything that needed to be posted was.
A Reconciliation Component. You must perform Balance Sheet reconciliations such Accrued Liabilities, Pre-paids, Cash/Bank Statements, etc.
Then, review the 1st Financial Statements to make sure you understand them, then make any necessary adjustments before issuing them to your team.
You can download the Closing Checklist here (No registration required). [download id=”351″ template=”Closing Checklist”]
