The quality of a bookkeeping practice is most visible at month-end. A well-run close produces accurate financial statements within a week of month-end, flags issues proactively, and gives the client and their tax agent reliable numbers to work with. A poorly run close produces scrambled reconciliations, unexplained variances, and last-minute BAS amendments. This checklist covers the core steps that should be completed for every client, every month.
Week 1: Transaction Completeness and Coding
The first priority is ensuring all transactions for the month are in the system and correctly coded. With modern cloud accounting software connected to bank feeds, the raw data is generally available within one to two business days of month-end. The bookkeeper's job is to review and confirm it.
Bank feed reconciliation is the centrepiece. Every transaction in the bank feed must be matched to a transaction in the accounting software, and every transaction in the accounting software must have a corresponding bank entry. Any unmatched items — bank transactions without a ledger match, or ledger entries with no bank transaction — must be investigated and resolved before the period is closed.
Common bank feed issues:
- Duplicate transactions from feed connectivity interruptions
- Transactions posted in the wrong period (timing differences)
- Merchant names that the coding rule engine cannot recognise, left as uncoded
For clients using ReconLink or similar bank reconciliation platforms, the automated coding rules handle the bulk of routine transactions. Review the uncoded queue first — these are the transactions that need judgment — then spot-check a sample of auto-coded transactions to confirm the rules are producing accurate results.
Credit card reconciliation follows the same process as bank reconciliation but often involves multiple cards and an additional liability account (credit card payable) that must reconcile to the statement closing balance.
Mid-Month: Payroll and Superannuation Review
Payroll should be reconciled separately from the bank accounts. The steps:
- Confirm the gross wages expense in the ledger matches the total of payroll reports for the month.
- Confirm PAYG withholding payable balance equals the amount withheld but not yet remitted.
- Confirm superannuation payable balance equals the super accrued but not yet paid. In Australia, super must be paid by the 28th of the month following each quarter — but the accrual should be recognised monthly.
- Confirm STP submissions for all pay runs in the month have been accepted by the ATO.
Payroll discrepancies discovered at month-end are significantly harder to resolve than those found week-by-week. If payroll is run weekly or fortnightly, a brief reconciliation after each pay run is the most efficient approach.
Liability Review: GST, PAYG, and Other Payables
Before producing any reports, review the key liability accounts:
GST collected and GST paid should both be reviewed. The net GST liability should be consistent with the volume of taxable transactions during the period. A significant movement in either account without a clear explanation (a large asset purchase, an unusually large sale) warrants investigation.
PAYG withholding payable should reflect exactly what has been withheld from employees during the period. If the client has already made a PAYG payment this quarter, confirm it has been applied correctly.
Accounts payable — confirm that all supplier invoices received during the month have been entered and that the AP ledger agrees with the outstanding balance in the creditors sub-ledger or supplier statements for key suppliers.
Accruals — for clients on accrual accounting, ensure any material expenses incurred but not yet invoiced (rent, utilities, insurance) have been accrued. This matters most for clients where management reports are used to make real business decisions.
Financial Report Review and Sign-Off
Once the reconciliations are complete, produce the monthly reports and review them before delivering to the client:
Profit and loss: Compare to the same month last year and to the prior month. Significant variances — revenue up or down more than 20%, an expense category that has doubled — should be understood before you send the report. Sometimes the answer is obvious (a one-off large sale, a quarterly insurance premium). Sometimes it reveals an error.
Balance sheet: Review that assets, liabilities, and equity are in expected ranges. An asset account with a credit balance, or a liability account with a debit balance, is almost always an error. Bank account balances should match the reconciled balances from step one.
Aged receivables and payables: Highlight any invoices or bills overdue more than 60 days for client attention.
The Sign-Off Process
Develop a formal sign-off process with each client. This does not need to be bureaucratic — a brief email summarising: "I have completed the month-end close for [Month]. The reconciled bank balance is $X. Key points: [2-3 items of note]. Please confirm any transactions you are aware of that are not reflected."
Getting the client's acknowledgement creates a record that the figures were reviewed and approved, which protects both the client and the bookkeeper if questions arise later. It also trains clients to engage with their financials rather than ignoring them until tax time.
Closing the Period
Once sign-off is received, lock the period in the accounting software. Xero, MYOB, and QuickBooks Online all have period lock features. Using them prevents accidental backdating of transactions and ensures that the month's figures are stable.
A locked, reconciled month is a reliable foundation. The client's tax agent has clean data to work with. The BAS is straightforward to prepare. And you — the bookkeeper — can start the next month knowing exactly where you stand.