Closing the books every month keeps your financials accurate, audit-ready, and decision-useful. The checklist below is designed for QuickBooks Online (QBO) and small-to-mid sized businesses in Los Angeles, but works anywhere. The goal is a consistent, repeatable process that delivers a clean profit & loss, balance sheet, and cash flow within 10–15 days of month end.
1) Lock the Period and Gather Inputs
Freeze changes from operational users by communicating the close window. Export bank statements, merchant processor activity, payroll registers, loan statements, and inventory reports.
2) Bank and Credit Card Reconciliations
In QBO, reconcile each bank and credit card account against the official statements. Investigate any unmatched transactions or odd service fees. Save reconciliation PDFs to your close folder.
3) Sales and A/R Review
Match sales to deposits (undeposited funds should clear). Review open invoices and unapplied credits. Recognize revenue using deferred revenue schedules when applicable.
4) Expenses and A/P Review
Ensure bills are entered with correct dates, vendors, and categories. Identify duplicates, late postings, and missing W-9s. Verify class/location and memo fields for reporting clarity.
5) Inventory, COGS, and Project Costs
Post inventory adjustments from counts or 3PL reports. Move costs to projects; align revenue recognition with milestones or percent-complete, as appropriate.
6) Accruals and Prepaids
Record accruals for expenses incurred but not yet billed, and amortize prepaids like annual insurance. Keep simple schedules attached to workpapers.
7) Fixed Assets and Loans
Capitalize qualifying purchases, calculate monthly depreciation, and tie loan balances to lender statements. Split interest and principal correctly.
8) Payroll and Taxes
Post payroll entries from your provider. Tie gross wages, taxes, and benefits to payroll registers. Verify payroll tax liabilities clear on schedule. Reconcile sales tax to filings.
9) Review the Financial Statements
Scan the P&L for anomalies; confirm A/R and A/P tie to aging; ensure subledgers match control accounts.
10) KPIs and Management Notes
Build a one-page dashboard: cash runway, gross margin, net burn or EBITDA, AR days, AP days, inventory turns. Document a short narrative on what changed and why.
11) Close and Lock
Set the closing date in QBO (with a password). Archive workpapers in a month-labeled folder structure for easy audit.
Consistent month-end closes build trust in your numbers. If you need help establishing a disciplined close, Lampkin Corporation, Inc. can implement a tailored checklist and KPI cadence for your business.