A Review of Month-End and Quarter-End Best Practices

A Review of Month-End and Quarter-End Best Practices 
Streamlining Processes Before the End of the Year 

Mindy Barker | Barker Associates

As we approach the end of the third quarter, it’s time for more than all things pumpkin spice, falling leaves, and cooler temperatures. For CFOs, it’s also time for quarterly financial reviews and audits. The third quarter is particularly relevant because as we near year-end (for calendar taxpayers), we want to ensure that our financials are in order for any strategic planning and budget planning needs for the new year. 

Quarter-End is Also Month-End

Just because it’s time for a quarterly review though does not mean it’s time to put aside our normal month-end review. As a reminder, best practices for month-end financial and accounting tasks include:

  • Reviewing the general ledger. 
  • Reviewing the balance sheet and profit and loss statement. 
  • Reconciling balance sheet accounts. 
  • Running budget comparisons  
  • Running prior year comparisons. 
  • Reviewing monthly bank reconciliations (particularly for any checks that have not been cleared or any suspicious activity). 
  • Ensuring all bills are current by reviewing Accounts Payable. 
  • Reviewing Accounts Receivable aging. 
  • Reviewing any investment activity.

With regard to specific quarter-end reviews, actual wages paid should be reconciled with any Form 941s that are issued. We always advise our clients to be especially cognizant of any adjustments that need to be made prior to the filing of the annual Form W-2, Wage and Tax Statement. Board and committee minutes required for annual audits should also be approved and filed at this time, and any scheduled quarterly audits conducted. Given our “new normal,” many companies are also taking a closer look at their financial technology at the end of each quarter. With more businesses operating virtually, ensuring your company has the most up-to-date technology and accessible systems is crucial to conducting business efficiently. 

Streamlining Closing Processes

While there is no doubt that much needs to be done during a month- and quarter-close, there is always room for improved efficiency in the processes. These closing procedures should not be days upon endless days (or weeks) of analysis of every small detail, particularly when those details have no impact on the company’s big picture or leadership’s decision making. Making this process longer than it has to be costs not only time, but also money.  

Leadership needs timely information to effectively run the business. Efficient month-end and quarter-end close processes not only increase timeliness, but also improve controls, and reduce risks. Streamlining these processes gets information to leadership faster for smarter decision-making. Streamlining can include:

  • Set a goal for a 3-5 day close (yes, it can be done). 
  • Gather a team for the closing process with clear directions and goals. Make sure everyone is in alignment and clearly understands what is expected of them pre-close. 
  • Prepare a detailed close schedule. This should be reviewed at the pre-close meeting. 
  • Conduct a post-close meeting to review what could have been done differently to improve the process. 
  • Continuously implement those improved procedures in future month and quarter closes.

After all, time is money, and no one knows that better than the CFO.  Barker Associates has extensive experience in helping companies streamline their month- and quarter-end closes. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100. 

Related Post

What is an Audit and Why do I Need One? In all my years as a CPA and a CFO, I do not recall anyone (ever) who has gotten excited about a financial audit.  No one wants to pay for a...