Glossary
Month End Close Process
A month end close process is the set of steps a finance team runs every month to reconcile accounts, book adjusting entries, and produce financial statements that are accurate enough to act on. It exists so that the number on your income statement on the 5th business day actually matches reality, not a rough estimate someone will “true up later.” At Treewalk, we treat the close as a control system first and a reporting exercise second: if the controls are right, the reporting takes care of itself.
What are the four steps in the closing process?
Most close checklists boil down to four stages, whatever software or industry you’re in:
Reconcile.
Bank, credit card, AR, AP, and intercompany balances get tied out to source documents.
Adjust.
Accruals, deferrals, depreciation, and correcting entries get booked based on what reconciliation turned up.
Review.
A second set of eyes, usually a controller or manager, checks the trial balance for anything that doesn’t make sense.
Report.
Financial statements go out, with commentary if the reader needs context to act on the numbers.
How long should a month-end close take?
There’s no universal answer, but five to ten business days is the realistic range for a small or mid-size company with a reasonably clean file. Public companies and regulated entities often need longer because of disclosure requirements. If your close regularly runs past the third week of the following month, that’s not a staffing problem you can hire your way out of. It’s usually a process problem: too much manual reconciliation, too many one-off spreadsheets, or a trial balance that depends on one person’s memory.
How we approach month-end close at Treewalk
Our controllership team, led by Erika Lausman, CPA, builds every close around a simple rule: the controller shouldn’t be doing the hands-on work.
In a well-run close, the controller should be doing almost nothing hands-on: adjusting journal entries, reviewing, and that is it. A controller’s job is to train the team underneath them to do the work. That is the standard we build client teams against. A close that depends on one senior person doing everything by hand will hold up fine at low volume and break the moment the business grows. We’ve seen it happen: a controller mid-transition rebuilding four income statements by hand in Excel because the underlying process never scaled past the size the company was three years earlier.
Our standard SOP runs on a structured monthly cadence with a supporting-documents folder for each period, plus a formal review and sign-off step before anything goes out the door. On accounts we run end to end, a five-day close is the standard we hold ourselves to, not an aspiration.
What is the month-end close system?
“System” here means two things, and it’s worth separating them. There’s the software system (your general ledger, bank feeds, AP automation), and there’s the process system (who does what, in what order, with what review gate). Buying better software without fixing the process system rarely moves the needle. We’ve watched a technology migration stall because staff resisted the new workflow, not because the software was wrong. The system that actually matters is the one written down: who reconciles what, by when, and who signs off before the numbers go out.
Common signs your close is broken
A few patterns show up again and again in books we take over:
- One person holds the entire close in their head, and nothing is documented.
- Clearing accounts never actually clear, they just get “adjusted” to zero.
- The trial balance closes on time but gets restated the following month.
- Reports are consistent in format but inconsistent in accuracy.
None of these are exotic problems. They’re what happens when a close was built for a smaller, simpler version of the business and never got rebuilt.
Frequently asked questions
Is a month-end close the same as bookkeeping?
No. Bookkeeping is the ongoing recording of transactions. The close is the periodic discipline of reconciling, adjusting, and reviewing that bookkeeping so the resulting statements can be trusted for decisions, lending covenants, or board reporting.
Do we need a formal close process if we’re a small company?
If anyone outside the business, a lender, a board, or a buyer, relies on your numbers, yes. Even a lean close with a short checklist beats an informal one where accuracy depends on a single person’s availability.
How is this different from how a Big Four style firm would run it?
Audit backgrounds train people to test a close after the fact, not run one month over month. Running a close well is an operational skill: reconciliation discipline, a clean review gate, and a team trained to catch problems before they compound.
What happens during a transition to a new provider?
We ask for full working papers and prior-period documentation up front and absorb the file into our monthly cadence rather than rebuilding it from zero. The goal is a close that’s stable from month one, not a gap while everyone gets oriented.
Can a broken close be fixed without starting over?
Usually. Most closes we take over don’t need to be rebuilt from scratch, they need reconciliation discipline restored and a real review step added. A full rebuild is only necessary when the underlying books are too far behind to trust.
Where to next
If your close depends on one person and a spreadsheet, the fix is usually process, not headcount. Our private companies team runs outsourced controllership and monthly close for growing businesses across BC. Email Erika Lausman, CPA at erika.lausman@treewalk.com to talk through where your close is breaking down.
