Close Management

# Close Management

**Important**: This skill assists with close management workflows but does not provide financial advice. All close activities should be reviewed by qualified financial professionals.

Month-end close checklist, task sequencing and dependencies, status tracking, and common close activities organized by day.

## Month-End Close Checklist

### Pre-Close (Last 2-3 Business Days of the Month)

- [ ] Send close calendar and deadline reminders to all contributors - [ ] Confirm cut-off procedures with AP, AR, payroll, and treasury - [ ] Verify all sub-systems are processing normally (ERP, payroll, banking) - [ ] Complete preliminary bank reconciliation (all but last-day activity) - [ ] Review open purchase orders for potential accrual needs - [ ] Confirm payroll processing schedule aligns with close timeline - [ ] Collect information for any known unusual transactions

### Close Day 1 (T+1: First Business Day After Month-End)

- [ ] Confirm all sub-ledger modules have completed period-end processing - [ ] Run AP accruals for goods/services received but not invoiced - [ ] Post payroll entries and payroll accrual (if pay period straddles month-end) - [ ] Record cash receipts and disbursements through month-end - [ ] Post intercompany transactions and confirm with counterparties - [ ] Complete bank reconciliation with final bank statement - [ ] Run fixed asset depreciation - [ ] Post prepaid expense amortization

### Close Day 2 (T+2)

- [ ] Complete revenue recognition entries and deferred revenue adjustments - [ ] Post all remaining accrual journal entries - [ ] Complete AR subledger reconciliation - [ ] Complete AP subledger reconciliation - [ ] Record inventory adjustments (if applicable) - [ ] Post FX revaluation entries for foreign currency balances - [ ] Begin balance sheet account reconciliations

### Close Day 3 (T+3)

- [ ] Complete all balance sheet reconciliations - [ ] Post any adjusting journal entries identified during reconciliation - [ ] Complete intercompany reconciliation and elimination entries - [ ] Run preliminary trial balance and income statement - [ ] Perform preliminary flux analysis on income statement - [ ] Investigate and resolve material variances

### Close Day 4 (T+4)

- [ ] Post tax provision entries (income tax, sales tax, property tax) - [ ] Complete equity roll-forward (stock compensation, treasury stock) - [ ] Finalize all journal entries — soft close - [ ] Generate draft financial statements (P&L, BS, CF) - [ ] Perform detailed flux analysis and prepare variance explanations - [ ] Management review of financial statements and key metrics

### Close Day 5 (T+5)

- [ ] Post any final adjustments from management review - [ ] Finalize financial statements — hard close - [ ] Lock the period in the ERP/GL system - [ ] Distribute financial reporting package to stakeholders - [ ] Update forecasts/projections based on actual results - [ ] Conduct close retrospective — identify process improvements

## Task Sequencing and Dependencies

### Dependency Map

Tasks are organized by what must complete before the next task can begin:

``` LEVEL 1 (No dependencies — can start immediately at T+1): ├── Cash receipts/disbursements recording ├── Bank statement retrieval ├── Payroll processing/accrual ├── Fixed asset depreciation run ├── Prepaid amortization ├── AP accrual preparation └── Intercompany transaction posting

LEVEL 2 (Depends on Level 1 completion): ├── Bank reconciliation (needs: cash entries + bank statement) ├── Revenue recognition (needs: billing/delivery data finalized) ├── AR subledger reconciliation (needs: all revenue/cash entries) ├── AP subledger reconciliation (needs: all AP entries/accruals) ├── FX revaluation (needs: all foreign currency entries posted) └── Remaining accrual JEs (needs: review of all source data)

LEVEL 3 (Depends on Level 2 completion): ├── All balance sheet reconciliations (needs: all JEs posted) ├── Intercompany reconciliation (needs: both sides posted) ├── Adjusting entries from reconciliations └── Preliminary trial balance

LEVEL 4 (Depends on Level 3 completion): ├── Tax provision (needs: pre-tax income finalized) ├── Equity roll-forward ├── Consolidation and eliminations ├── Draft financial statements └── Preliminary flux analysis

LEVEL 5 (Depends on Level 4 completion): ├── Management review ├── Final adjustments ├── Hard close / period lock ├── Financial reporting package └── Forecast updates ```

### Critical Path

The critical path determines the minimum close duration. Typical critical path:

``` Cash/AP/AR entries → Subledger reconciliations → Balance sheet recs → Tax provision → Draft financials → Management review → Hard close ```

To shorten the close: - Automate Level 1 entries (depreciation, prepaid amortization, standard accruals) - Pre-reconcile accounts during the month (continuous reconciliation) - Parallel-process independent reconciliations - Set clear deadlines with consequences for late submissions - Use standa