What a Good Monthly Close Looks Like (and When You Should Get Your Financials)
Ask a room of business owners when their monthly financials show up, and you'll hear everything from "around the 10th" to "sometime next month" to "we really only look at them at year-end."
That range is the problem. If you don't know when your numbers are coming, you can't plan around them. And if they show up six weeks late, they're a history lesson, not a tool.
The fix isn't working harder. It's a consistent monthly close: the same steps, in the same order, every month. Here's what that looks like in plain English, what you should receive when it's done, and when it should land in your inbox.
What "closing the books" actually means
Closing the month means your books for that month are complete, checked, and final. Every transaction is recorded, every account matches its statement, and the numbers won't change after you've seen them.
Until a month is closed, any report you pull is a draft. It might be close. It might be way off. You can't tell which.
The 5 steps of a good monthly close
1. Get every transaction in. Sales, customer payments, bills, payroll, credit card charges, and loan payments all get recorded. The bank feed is fully reviewed, with every transaction in a real category (not "Uncategorized"). Missing receipts and unclear charges get flagged and asked about now, not next March.
2. Reconcile every account. Every bank account, credit card, and loan gets matched to its statement until the difference is zero. This is the step that proves your cash balance is real. It's also where duplicate entries, missing deposits, and odd charges show up.
3. Clean up the balance sheet. Most owners look at the profit and loss first. A good close looks at the balance sheet first, because that's where problems hide. That means reviewing receivables and payables for old or wrong balances and checking the accounts that should always be zero: Uncategorized Income and Expense, Undeposited Funds (Payments to deposit), and Ask My Accountant.
4. Book the adjustments. Some costs never show up as a bill or a bank charge. Depreciation, prepaid insurance being used up, wages earned but not yet paid, and bills for work already done all get recorded in the month they belong to. Skip this step and your profit swings up and down for reasons that have nothing to do with how the business actually did.
5. Review, deliver, and lock the month. Before anything goes out, someone compares the month with last month and the same month last year, and asks "why?" about anything that moved. Then the reports are delivered, and the month is locked with a closing date in QuickBooks so no one changes it by accident.
What you should receive every month
A closed month should come with a package, not just a profit and loss report attached to an email. At a minimum, expect:
Balance sheet: what you own, what you owe, and what's left.
Profit and loss statement: for the month and year to date, compared with last month, last year, or your budget.
Statement of cash flows: where cash came from and where it went, so you can see why profit and cash don't match.
A/R and A/P aging: who owes you, who you owe, and how old each balance is.
A short summary: a few plain-English lines on what changed and what needs your attention.
If you work with a fractional controller or CFO, add a budget-vs-actual review and an updated cash flow forecast.
You shouldn't need an accounting degree to read your financials. If yours arrive with no explanation, ask for one.
When should you get your financials?
A good benchmark is the 20th of the following month. September's numbers by October 20. October's by November 20.
Why the 20th? Bank and credit card statements arrive during the first week or so of the month. Reconciling, cleaning up, and reviewing takes a few more days to do right. The 20th leaves room to do the job carefully while the numbers are still fresh enough to act on.
At Biz AccountPros, monthly financials by the 20th is written into our client contracts, and most clients get them sooner. The one thing that can push delivery later is waiting on information from the client, which is why a good close starts with a clear list of what's needed and when.
If your reports regularly show up after the end of the following month, or not until year-end, you're making decisions on numbers that are already out of date.
Signs your monthly close isn't working
It's past the 20th and you're still waiting on last month's numbers.
Numbers change after you've already seen them.
You get a profit and loss report but never a balance sheet.
Uncategorized or Ask My Accountant carries a balance month after month.
Your tax preparer has to clean up the books before they can file.
Nobody can explain why profit went up but cash went down.
Recognize two or more? It's usually not a people problem. It's a sign that the setup your business started with hasn't kept up with where it is now.
What to do next
Ask two questions. Ask your bookkeeper, "What date will I get my monthly financials?" and "What's included?" Clear answers are a good sign. Vague ones tell you something too.
Check where you stand. Our free Have You Outgrown Your Bookkeeper? Scorecard takes about two minutes: 12 questions, and no one sees your score but you.
If you want a team that closes your books by the 20th every month, schedule a no-pressure call with us. No obligation, just clarity.
This article is for general information only. Every business is different, so talk with a qualified professional about your specific situation.
