Why the Monthly Close Deserves Your Attention

The monthly close is one of the most consequential recurring processes in finance. It sets the foundation for every report, forecast, and decision that follows. Yet in many organizations, the close remains a chaotic sprint filled with last-minute journal entries, frantic Slack messages, and spreadsheets flying across inboxes.

A well-run close process does more than produce accurate financials on time. It creates a rhythm that the entire finance team can rely on, reduces the risk of material misstatement, and—perhaps most importantly—gives your team the breathing room to actually analyze the numbers rather than just compile them.

Diagnosing Your Current Close

Before you can improve the close, you need to understand where the bottlenecks actually live. Start by mapping the process end to end.

Step 1: Build a Close Calendar

Document every task that happens during the close, who owns it, when it starts, and when it must be completed. Most teams discover that 60 to 70 percent of close tasks are concentrated in the first three days, creating a predictable crunch.

A well-structured close calendar includes:

  • Task name and description so that ownership is unambiguous
  • Predecessor dependencies showing which tasks must finish before others can begin
  • Due dates expressed in business days relative to period end (e.g., Day +1, Day +2)
  • Responsible person and reviewer for every line item

Step 2: Identify the Critical Path

Not every close task is created equal. Some tasks gate everything downstream. If your revenue recognition process consistently finishes late, every report that depends on revenue data slips with it. Use a simple dependency map to find the longest chain of sequential tasks. That chain is your critical path, and shortening it is the fastest way to accelerate the overall close.

Step 3: Quantify the Pain

Track metrics that reveal where the process breaks down:

  • Days to close: The number of business days from period end to the date financials are final
  • Number of post-close adjustments: A proxy for accuracy during the initial close
  • Hours spent on manual reconciliations: Identifies automation opportunities
  • Number of open items carried forward: Shows whether issues are being resolved or deferred

Five High-Impact Improvements

Once you have a clear picture of the current state, focus your energy on the changes that deliver the most value.

1. Shift Work Before Period End

The single biggest lever is moving tasks out of the close window entirely. Accruals for recurring expenses, intercompany eliminations with predictable patterns, and prepaids with fixed schedules can all be estimated and booked before the period closes. Reserve the close window for items that genuinely require final data.

Practically, this means creating a “pre-close checklist” that runs during the last week of the month. Teams that adopt this approach routinely shave one to two full days off their close timeline.

2. Standardize Journal Entry Templates

Non-standard journal entries are a leading source of errors and review delays. Create templates for every recurring entry with pre-populated accounts, descriptions, and supporting documentation requirements. When an entry looks the same every month, the reviewer can approve it in seconds rather than minutes.

3. Implement Continuous Reconciliation

Waiting until the close to reconcile balance sheet accounts is a legacy practice from the era of batch processing. Modern tools allow reconciliations to happen daily or even in real time. At minimum, high-volume accounts like cash, accounts receivable, and accounts payable should be reconciled weekly so that the close-period reconciliation is a confirmation step rather than a discovery exercise.

4. Automate Intercompany Eliminations

For multi-entity organizations, intercompany transactions are one of the most time-consuming close activities. If your ERP supports automated intercompany elimination rules, invest the time to configure them properly. If it does not, build a standardized workbook with formulas that pull trial balance data and generate elimination entries automatically.

5. Establish a Close Retrospective

After every close, spend 30 minutes with the team reviewing what went well, what caused delays, and what should change next month. This is not a blame session. It is a structured improvement cycle. Keep a running log of action items and track completion. Teams that run close retrospectives consistently see measurable improvement within three to four cycles.

Building a Close Checklist That Actually Works

A close checklist is only useful if it reflects reality. Here is a framework for building one that your team will actually follow.

Structure by Workstream

Organize tasks into logical groupings such as revenue, expenses, payroll, intercompany, balance sheet, and consolidation. Within each workstream, list tasks in chronological order.

Assign Clear Ownership

Every task needs exactly one owner. Shared ownership is no ownership. If two people are involved, designate one as the preparer and one as the reviewer, with the preparer owning the deadline.

Define “Done”

For each task, specify what completion looks like. “Reconcile cash” is vague. “Reconcile all bank accounts to GL with variances under $500 investigated and documented” is actionable.

Use Status Tracking

Whether you use a purpose-built close management tool or a shared spreadsheet, every task should have a visible status: not started, in progress, in review, or complete. This transparency lets managers identify delays in real time rather than discovering them at the end.

Technology Considerations

Close management software such as FloQast, BlackLine, or Trintech can dramatically improve visibility and accountability. These platforms provide task management, automated reconciliation, and integration with major ERPs. However, technology alone does not fix a broken process. Invest in process design first, then layer in tools that reinforce the workflows you have built.

For teams that are not ready for dedicated software, a well-maintained shared spreadsheet combined with disciplined use of your ERP’s scheduling features can deliver meaningful improvement at zero incremental cost.

Measuring Progress Over Time

Track your close metrics monthly and review them quarterly. Healthy targets for a mid-market company include:

  • Days to close: 5 to 7 business days, with a stretch goal of 4
  • Post-close adjustments: Fewer than 3 material adjustments per period
  • Team overtime during close: Declining quarter over quarter

Celebrate improvements visibly. When the team shaves a day off the close, acknowledge it. Continuous improvement only works when people see that their effort produces results.

Final Thoughts

Improving the monthly close is not a one-time project. It is an ongoing discipline that compounds over time. Start with the diagnostic, pick two or three high-impact changes, implement them rigorously, and then reassess. Within two to three quarters, you will have a close process that is faster, more accurate, and far less stressful for everyone involved.