A month end checklist is an important tool we can utilize to contribute to the efficiency of a month end close process. It is another way we can distinguish ourselves and add value to what we can offer our client. It will not only help organize the tasks, it will also help to understand where bottlenecks can occur and to understand which items can have a detrimental effect on the efficiency and speed with which the team can accomplish the month end close. Whether it is our own staff or that of our client’s, it can help everyone understand and plan for how to most efficiently use resources.
To be effective, the list should be detailed, outline due dates, responsibility, time necessary to complete and information on dependent items. It should also serve as a planning guide to determine resources needed and to be able to communicate in a quantitative manner to everyone involved, including your client.
Start with the date you want preliminary financials and work backwards. Be as detailed as possible, listing items that need to be prepared for the journal entry, reports that need to be run and any reconciliations needed before the journal entries can be made. There should be a open box for the journal entry number and the person approving the entry. As items are completed during the close process, items should be checked off. A daily review of the progress is necessary to determine if anything needs to be adjusted to stay on target; if resources need to be reassigned, additional analysis is needed or if the time estimates were not realistic.
An important part of the process is to determine a reasonable amount of time needed to complete the journal entry. This can be a challenge, particularly if it’s a new client. There is often quite a bit of information you don’t have initially. For example, if the accounts have been regularly reconciled the time is much more predictable and less likely to require additional analysis. If there are reports that need to be run or supporting schedules to be prepared, they should be listed separately and checked off.
When everything is checked off preliminary financials can be prepared and reviewed. If adjustments are needed, the monthly checklist can be used to determine what journal entries can be reviewed for possible adjustments, allowing you to quickly locate the journal entry #.
The month end checklist is an important part of every accounting cycle. It maintains structure and discipline in your financial system and ensures your accounting stays on track. TGG Accounting can help you implement this practice. Call us today.Written by: Nancy Brzezniak TGG Accounting