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What is Month End Close Process? Steps, Checklist, Best Practices

What is Month End Close Process? Steps, Checklist, Best Practices

month end close process

Make a thorough month-end close checklist to ensure you have all the information required to finish the process. You can carry out the month-end close procedure in an organized manner with the aid of the checklist. Therefore, there is no need for you to repeatedly waste time looking for the necessary information every month.

What are the steps in project closure?

  • Arrange a Post Mortem. Managing a project isn't only about tasks and resources, budget and deadlines, it's an experience you can constantly learn from.
  • Complete Paperwork. As noted, projects generate reams of documents.
  • Release Resources.
  • Archive Documents.
  • Celebrate Success.

Keep in mind that automation technology can expedite the entire process and maintain accuracy throughout it all. Document the depreciating value of fixed assets and any outdated inventory. However, they also would likely prefer everything to be streamlined so that nothing slips through the cracks. Automation software like SolveXia can also automate your approval processes to reduce bottlenecks and delays.

Step 3 – Prepare Account Reconciliations

Large hassles during the month end closing process might be an indication of underlying issues with your business’s approach to accounting. Period-end closing involves closing accounting records for a specific period, making adjustments, and creating financial statements. Month-end closing is a similar process that occurs at the end of each month to ensure accurate financial reporting. But there’s a lot that needs to be done before those few closing entries can happen. Journal entries for depreciation and amortization need to be calculated and posted. Depending on your organization, you may have additional adjustments, allocations, and accruals to make.

What are the 4 steps in the closing process?

  • Close revenue accounts to income summary (income summary is a temporary account)
  • Close expense accounts to income summary.
  • Close income summary to retained earnings.
  • Close dividends (or withdrawals) to retained earnings.

Surveys and research over the years show the month-end process generally takes between 5-10 days. Some activities can be recorded or reconciled more frequently than monthly to help speed up the process at month’s end. Performing a month-end close helps build confidence in the company’s financial data which is used to prepare its financial statements. The process ensures that the data in those statements is reliable and accurate.

Conduct a final review

In post-close meetings, discuss what worked and what didn’t, and review assigned roles and responsibilities for the next month. Review any lessons learned, any variances or abnormalities, and entertain any proposed changes to the process. During pre-close meetings, the month end close process team should discuss follow-up items from the previous month’s post-close meeting and determine the current month’s close schedule and timeline. You should also determine what staff should do if they run into barriers and how they should communicate any bottlenecks.

  • Once all of these tasks are completed, you’ll be ready to follow the specific instructions for closing the books in QuickBooks, Netsuite, or Sage Intacct.
  • Establishing a series of steps and assigning roles for different closing tasks sets expectations and provides clarity throughout the process.
  • You can also send an email with your requirements to so that we can contact you as soon as possible.
  • Improve the prioritization of customer calls, reduce days sales outstanding, and watch productivity rise with more dynamic, accurate, and smarter collection management processes.
  • Your month-end process should include ways to automate as many tasks as possible to free your team to focus on the tasks they do best.
  • Make sure the process is set up so that the final movement doesn’t require any rushing.
  • Due to the amount of moving parts and data required to perform the month end close process, it’s helpful to have a checklist for reference.
  • It is challenging to manage a business without readily available financial statements.

Closing the books each month can be a tedious process, but it is vital to ensuring the financial health of your company. The month end close can help you identify deviations from your financial plan early, so you can respond quickly. Conversely, it can uncover new opportunities for business growth, and drive strategies so you can exploit them.

What are Month End Process Flowchart Best Practices?

After completing the form, a TechCXO advisor will reach out to learn more about your project or team needs and match you to the perfect finance and accounting talent. Even larger organizations struggle with fragmentation and coordinating company-wide financial work, as they are spread out across multiple geographic locations. The frustration is further exacerbated by the high number of interdependencies to take into account. Some tasks need to be scheduled according to a date or time or need to be triggered by dependencies. Thanks to automation, there will be no need to constantly monitor each task and notify responsible individuals of the next steps.

Bank reconciliations will also help you understand your cash situation and not overdraw your account. While you may lack the resources to hire more staff, training some employees for crucial steps in the closing process may be a viable option. As long as an experienced financial professional or manager takes responsibility for month-end closing, this alternative can work for your business.

And working in this environment only leads to more errors and missed deadlines. Businesses can improve efficiency by leveraging the capabilities of the best automation software. Keep all data backed up in the event of a breach or the need to refer back to historical data for forecasting or budgeting. Using a tool like SolveXia’s system means that you’ll always be able to ensure bank grade data security.

month end close process

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Accounts Payable Debit or Credit: What is a Normal Balance?

Accounts Payable Debit or Credit: What is a Normal Balance?

normal balance of accounts

Let’s recap which accounts have a Normal Debit Balance and which accounts have a Normal Credit Balance. Then, I’ll give you a couple of ways to remember which is which. We want to specifically keep track of Dividends in a separate account so we assign it a Normal Debit Balance. Liabilities (on the right of the equation, the credit side) have a Normal Credit Balance. Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years.

It’s the column we would expect to see the account balance show up. When an account produces a balance that is contrary to what the expected normal balance of that account is, this account has an abnormal balance. Let’s consider the following example to better understand abnormal balances. Sometimes, the profit from selling the product from the supplier is also debited by the company.

Normal account balance definition

For example, upon the receipt of $1,000 cash, a journal entry would include a debit of $1,000 to the cash account in the balance sheet, because cash is increasing. If another transaction involves payment of $500 in cash, the journal entry would have a credit to the cash account of $500 because cash is being reduced. In effect, a debit increases an expense account in the income statement, and a credit decreases it. These accounts normally have credit balances that are increased with a credit entry. If there is a reduction in the amount owed to suppliers and the firm’s account payable, the business has satisfied its outstanding normal balance of accounts debts to the vendors. Similarly, a rise in the account payable would indicate an increase in both the amount of money owed to the supplier and the amount of money owed by the company.

  • Certain accounts are used for valuation purposes and are displayed on the financial statements opposite the normal balances.
  • A contra account, also known as a contrast account, is which is used in normal balance for accounts.
  • Liabilities are usually recorded as a credit on your balance sheet.
  • Under this column, the difference between the debit and the credit is recorded.
  • The debit amount recorded by the brokerage in an investor’s account represents the cash cost of the transaction to the investor.

As a result, the natural balance of a contra account is always opposite to the original accounts. The debit amount recorded by the brokerage in an investor’s account represents the cash cost of the transaction to the investor. For example, if Barnes normal balance of accounts & Noble sold $20,000 worth of books, it would debit its cash account $20,000 and credit its books or inventory account $20,000. This double-entry system shows that the company now has $20,000 more in cash and a corresponding $20,000 less in books.

Normal Balance Of An Account Definition

All accounts that normally contain a debit balance will increase in amount when a debit (left column) is added to them and reduced when a credit (right column) is added to them. The types of accounts to which this rule applies are expenses, assets, and dividends. A debit is an accounting entry that results in either an increase in assets or a decrease in liabilities on a company’s balance sheet. In fundamental accounting, debits are balanced by credits, which operate in the exact opposite direction.

To decrease these accounts, Cash must be credited and Sales must be debited. See operating expenses examples and learn how to find operating expenses on an income statement. The concept of debits and offsetting credits are the cornerstone of double-entry accounting. However, if you’re dealing with a DR account, a debit transaction will actually increase it and a credit transaction will decreases it.

Normal Balance Of An Account

At the end of the accounting year the balances will be transferred to the owner’s capital account or to a corporation’s retained earnings account. Whenever cash is received, the asset account Cash is debited and another account will need to be credited. Since the service was performed at the same time as the cash was received, the revenue account Service Revenues is credited, thus increasing its account balance. Revenues and gains are recorded in accounts such as Sales, Service Revenues, Interest Revenues (or Interest Income), and Gain on Sale of Assets.

normal balance of accounts

Adjusted debit balance is the amount in a margin account that is owed to the brokerage firm, minus profits on short sales and balances in a special miscellaneous account (SMA). While a long margin position has a debit balance, a margin account with only short positions will show a credit balance. The credit balance is the sum of the proceeds from a short sale and the required margin amount under Regulation T. The debit balance, in a margin account, is the amount of money owed by the customer to the broker (or another lender) for funds advanced to purchase securities. All the surplus, revenues, and gains have a credit balance, whereas, all the deficit, losses, and expenses have a debit balance. Normal balance of an account refers to the ledger side where the balance of an account is normally seen or expected.

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How To Void a Blank Check

How To Void a Blank Check

deposit account

No, it isn’t necessary to sign or put any information on a voided check. We believe by providing tools and education we can help people optimize their finances to regain control of their future. While our articles may include or feature select companies, vendors, and products, our approach to compiling such is equitable and unbiased. The content that we create is free and independently-sourced, devoid of any paid-for promotion. Then, you can send the remaining $200 to your savings account.


Crypto on Juno is not currently available in HI and NY. Cryptocurrencies are highly speculative in nature, involve a high degree of risk and can rapidly and significantly decrease in value. It is reasonably possible for the value of cryptocurrencies to decrease to zero or near zero. Cryptocurrency services are powered by Zero Hash LLC and Zero Hash Liquidity Services LLC and may not be available in all states. When you buy or sell cryptocurrency, a difference between the current market price and the price you buy or sell that asset for is called a spread. However, unlike most other exchanges, Juno does not charge an additional trading fee. All forms of investments carry risks, including the possible loss of principal.

How to void a blank check

Although you can sometimes deposit a voided check in an ATM, this type of error is likely to be spotted when human tellers review the machine’s deposits. Any erroneously-cleared funds will then be removed from the recipient’s bank account and returned to the original owner. If a voided check clears, customers can file a claim when they receive their statement. If you have a checking account that doesn’t offer checks, you can try these options for setting up direct deposit or electronic payments.

How do you get a voided check without going to the bank?

If you have to provide a voided check, you don't have to request one from your bank or credit union. You can just detach a check from your supply and write "VOID" on it yourself. The word "VOID" doesn't have to cover the entire check, but it should be big enough and dark enough so that the check cannot be used.

A voided check is a check with the word “VOID” across it, which indicates that it shouldn’t be used for payment. It’s typically written in large letters, so it cannot be mistaken for cash use. Voiding a check prevents the check from being used by anyone, especially thieves who could write a large sum of money out to themselves. Typically, a voided check is used to get information needed for electronic payments because it includes details such as your routing number, account number, and check number. From employers, to payment services, to government agencies, requests for voided checks are still common.

How do I print my check image?

She holds a Bvoided checkelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands. There are a lot of things we didn’t realize we’d need to know as adults.