Day one — the things that cannot be fudged
Bank first. Every other balance is an opinion until the bank says otherwise.
- Reconcile every bank, card and payments account to the statement. No unreconciled account, no close.
- Clear the suspense and unmatched-payment accounts to zero. Leftovers here are the source of most restatements.
- Agree the payroll journal to the payslip totals and the pension and HMRC payments for the period.
- Cut off sales and purchase invoices: anything dated in the new month stays in the new month, however tempting it is to key it through.
Day two — the balances
The balance sheet is where a rushed close shows up a year later.
- Debtors: aged list agreed to the control account, credit balances and unapplied cash identified, provisions reviewed against the over-90 bucket.
- Creditors: goods-received-not-invoiced and expenses-owed posted, supplier statements agreed for the top ten by spend.
- Stock: count or agree the carrying value, and check that any obsolescence you discussed last month actually made it into the numbers.
- Fixed assets: additions, disposals and the depreciation charge, agreed to the register.
- Accruals and prepayments: roll last month's list forward and delete anything nobody can explain.
- VAT: the return figure reconciled to the ledger, and any Making Tax Digital or real-time information question raised with your accountant rather than guessed at — see gov.uk for the rules.
Day three — review and lock
The close is not finished when the journals stop; it is finished when someone has looked at the result with fresh eyes and signed it.
- Movement report: every balance sheet account, prior month, current month, variance, and an explanation for anything above your materiality threshold.
- Ratio sanity check: days sales outstanding, days payable outstanding and gross margin against last month and last year. Margins that move without a price change are usually a cut-off error.
- One page for the owner: cash, profit, what changed, what to watch next month.
- Lock the period so nothing posts backwards, and keep the exception list.
What to do when it slips
Ship the cash and debtors numbers on day two even if accruals are unfinished. A slightly conservative profit figure delivered while the month is still actionable beats a complete one that arrives after the decisions have been made.
Questions
Three working days is a reasonable target below roughly £5m of turnover with a bookkeeper and an oversight review. If it reliably takes longer, the cause is usually unmatched bank items and late supplier invoices, not the journal work itself.
No. Close your own books, then hand over a locked period with a reconciliation pack. Accountants charge for untangling, and the untangling is what you have just removed.
Bank reconciliations signed and dated, the aged debtor and creditor lists at the close date, the movement report and the exception list. That is enough for an owner, a lender or a due-diligence review.
This is general guidance on process, not tax, legal or investment advice. Statutory deadlines and rules change; check the current position on gov.uk or with your accountant before you rely on anything here.