Five Things Every Small Business Owner Should Include in Their Month-End Close
The month-end close process is a critical habit that every small business owner should adopt—and refine over time. When done consistently and correctly, it brings clarity to your finances, highlights key performance trends, and helps you avoid costly errors.
In this post, we’ll walk through five essential elements to include in your month-end close, along with practical tips to help you streamline the process and improve financial accuracy.
1. Implement a Month-End Close Checklist
Every month-end close should begin with a standardized, repeatable checklist.
A well-crafted checklist ensures that nothing important is overlooked—from bank reconciliations to journal entries—and helps keep your process efficient and consistent. It also minimizes missed steps, reduces last-minute scrambles, and allows for easier delegation when multiple team members are involved.
2. Verify 1099 Vendor Compliance and W-9 Collection
Ensure that all vendors who were paid over $600 during the month via cash, check, or ACH have a W-9 form on file and are properly tracked for 1099 reporting in your accounting software.
Checking this monthly reduces the year-end scramble to collect forms, ensures tax compliance, and helps avoid penalties for incorrect or late 1099 filings. Software like QuickBooks Online allows you to flag eligible vendors as you go.
3. Use Bank Feeds and Rules When Categorizing Transactions
Modern accounting software—like QuickBooks Online—lets you connect your bank and credit card accounts directly to your books.
This automation imports transactions daily, reducing manual entry and helping you stay on top of your financial records. Creating bank rules to auto-categorize recurring expenses improves consistency, saves time, and minimizes errors.
4. Record Accrual Entries as Needed
Accrual entries ensure that revenue and expenses are recorded in the period they actually relate to—not just when cash changes hands. At month-end, this might include deferred revenue, accrued expenses, and prepaid items.
Without these entries, your financials could show misleading profits or losses. Recording accruals gives you a more accurate picture of profitability—especially important when you’re making strategic decisions.
5. Perform a Month-Over-Month Variance Analysis
Comparing your financial statements to the previous month (or your 12-month trend) helps identify potential errors, miscategorized transactions, and unusual spikes or drops in activity.
Sudden changes may indicate missing entries, unrecorded revenue, or one-time costs that should be clarified. Performing this kind of variance analysis regularly ensures you catch issues early—before they become financial reporting problems.
Make Your Month-End Close Work for You
A clean, consistent month-end close doesn’t just keep your books in order—it gives you the clarity, confidence, and control you need to run your business more effectively.
By building in these five habits each month, you’ll create financial visibility that supports smarter decision-making, strengthens compliance, and saves you time in the long run.
Even implementing just one of these steps can significantly improve the accuracy and value of your financial reports—giving you better insight and less stress when it comes to managing your business finances.
If your month-end process still feels messy, overwhelming, or time-consuming, schedule a free consultation with us.
We can explore ways to simplify your systems and bring more confidence to your financial routine—no pressure, just helpful support.
