Month-End Close

What Is Month-End Close?

Month-end close (also called “closing the books”) is the accounting process of finalizing all financial transactions and producing accurate financial statements at the end of each month. This includes reconciling accounts, recording adjustments, and ensuring all revenue and expenses are properly categorized.

A typical month-end close involves:

• Recording all transactions from the period
• Reconciling bank accounts and credit cards
• Posting accruals and adjusting entries
• Intercompany eliminations (for multi-entity organizations)
• Producing financial statements (P&L, balance sheet, cash flow)
• Variance analysis and management reporting

How Long Should Month-End Close Take?

Industry benchmarks suggest:

• Best-in-class: 3-4 business days
• Average: 6-8 business days
• Lagging: 10+ business days

Yet many mid-market companies report month-end close taking 2-3 weeks, with finance teams working weekends to hit deadlines.

Why Does Month-End Close Take So Long?

The primary culprit isn’t the accounting work itself—it’s data gathering:

Data scattered across systems: Revenue in the CRM, expenses in the ERP, payroll in a separate system, adjustments in spreadsheets.

Manual reconciliation: Finance teams spend hours matching transactions between systems, hunting down discrepancies.

Waiting on other departments: Expense reports, inventory counts, and project updates arrive late or incomplete.

Error correction: Manual data handling introduces mistakes that must be found and fixed.

Documentation: Creating audit trails for how numbers were derived.

How to Speed Up Month-End Close

Modern finance teams are reducing close time through automation and data centralization:

1. Centralize data automatically: Connect all financial systems to pull data continuously, not just at month-end
2. Automate reconciliations: Use matching algorithms to reconcile transactions automatically
3. Standardize close checklists: Create repeatable processes that don’t depend on tribal knowledge
4. Push data to reporting tools: Automatically populate Excel templates and dashboards
5. Implement continuous close: Process transactions throughout the month instead of batching at month-end

Month-End Close Automation ROI

Organizations that automate month-end close typically see:

• 50-75% reduction in close time
• 80% fewer manual errors
• Significant reduction in overtime hours
• Earlier availability of financial data for decision-making

The key insight: most close delays come from data problems, not accounting problems. Fix the data pipeline, and close accelerates naturally.