Month-End Close Checklist: 7 Steps for Controllers

Late expense reports, missing receipts, and manual coding errors turn month-end close into a multi-day scramble for accounting teams.

This process of finalizing financial records for an accounting period is essential: It’s when finance teams collect and post transactions, reconcile accounts, prepare accruals for expenses incurred but not yet recorded, and review results before locking the period. And when transaction data arrives incomplete (or not at all), controllers spend more time assembling information than analyzing it.

How much time should it take? Top-performing companies complete this process in just 3-6 business days because they reconcile continuously throughout the month rather than batching at period-end, set accrual deadlines before the last business day, and automate routine verification tasks.

Here’s how to follow their lead.

7 Steps to Include in Your Month-End Close Checklist

A structured checklist helps prevent missed steps and reduces errors. The following sequence covers each phase of the close process.

1. Validate Subledger to General Ledger Balances

Before proceeding with close procedures, verify that subledger systems reconcile to the general ledger.

Accounts payable, accounts receivable, payroll, and expense management systems should tie to GL control accounts. Discrepancies discovered at this stage indicate missing transactions or posting errors that require correction before moving forward.

Pay particular attention to timing differences between when transactions post to subsidiary systems and when they appear in the general ledger.

For travel and expense, common timing differences include corporate card transactions that post to the card system before expense reports are approved, or travel bookings recorded as prepaid assets before the trip occurs.

These timing gaps are often expected. Document them with supporting evidence rather than treating them as errors requiring correction.

Once subledger balances reconcile, turn to individual transactions awaiting final posting.

2. Review and Post All Pending Transactions

Look for approved expense reports awaiting final posting, pending journal entries, transactions in clearing or suspense accounts (particularly from travel and expense system extracts or corporate card reconciliations), and any accrued expenses recorded during the period.

For each batch, verify the period assignment by confirming that transaction dates match when the company actually received services or goods — not the approval date or posting date.

For publicly traded organizations subject to Sarbanes-Oxley Act Section 404 — which requires management to annually assess and report on internal controls over financial reporting — document who performed each reconciliation, when they completed it, and how they resolved discrepancies.

3. Reconcile Bank and Credit Card Accounts

Reconcile bank statements to GL cash accounts (beginning balance through ending balance) and document any discrepancies.

For corporate cards, compare card statements to recorded liabilities and confirm that expense reports support each transaction.

Distinguish between when the credit card liability posts (statement date) and when the expense should be recognized (when services were rendered, per GAAP). Automated systems that sync card transactions with expense data at the point of swipe reduce this matching work significantly.

For completed travel without submitted expense reports, record accruals in the current period to maintain proper matching, then reverse them when actual reports arrive.

Reconcile travel advances by comparing the pre-trip cash given to employees against the expenses they actually incurred, with employees refunding any excess or receiving reimbursement for overages.

With cash and card accounts reconciled, the next step addresses expenses that haven’t hit the books yet.

4. Prepare Accruals for Incurred but Unreported Expenses

Identify expenses the organization incurred during the period that haven’t been recorded yet. For travel and expense, this includes completed trips without submitted expense reports, approved purchases not yet invoiced, and services rendered but not billed.

Under GAAP, expenses must be recorded in the period when the organization receives services, not when it pays cash or when employees submit reports.

Estimate unknown amounts using historical patterns — such as average unreported expenses per completed trip. Record the calculation method and data sources, then apply the same approach each period for audit traceability.

5. Verify GL Coding Accuracy and Cost Center Assignments

Expense report errors can be time-consuming — and costly. Catching them after close is even more expensive, because correcting journal entries requires additional approvals and audit documentation.

Check three areas before locking the period:

• GL accounts: Mixing expense categories creates tax compliance problems at year-end. Meals and entertainment require different treatment than office supplies — verify each transaction posts to the correct account.
• Cost centers: Incorrect department coding distorts budget reporting. When employees transfer mid-period, confirm transactions made after the change date hit the new cost center.
• Project tags: Missing project codes delay client invoicing. Billable travel expenses need project codes or Work Breakdown Structure (WBS) elements before close.

Accurate coding at the transaction level sets up the balance sheet and income statement review.

6. Reconcile Balance Sheet Accounts and Review Income Statement

Perform detailed reconciliations for balance sheet accounts, including prepaid expenses, accrued liabilities, fixed assets, and equity accounts.

For travel-related accounts, reconcile prepaid travel (advance bookings for future trips) and accrued travel liabilities (completed travel awaiting expense submission).

Analyze income statement line items against budget, prior period, and expected trends. Investigate significant variances to determine whether they reflect actual business activity or errors requiring correction.

7. Lock the Accounting Period and Document Completion

After all review procedures are complete and adjustments posted, lock the accounting period to prevent further changes.

Most ERP systems prevent overrides to accounting codes after month-end close to preserve data integrity, and any post-close adjustments must go through formal journal entry processes.

Archive reconciliation reports, transaction review logs, and discrepancy notes with the period’s close package for audit retrieval.

Best Practices to Accelerate Month-End Close

The seven steps above represent the minimum requirements for a clean close. Accounting teams that close faster capture expense data at the source, so transactions arrive ready to post.

Four practices make this possible:

Set Submission Deadlines Before Period-End

Require expense reports within 5 business days of trip completion. Late submissions force accounting teams to estimate accruals, then reverse and rebook when actual reports arrive.

Capture Receipts at Point of Purchase

Mobile receipt capture with optical character recognition (OCR) prevents the end-of-month scramble for missing documentation. When systems apply GL codes and cost centers automatically based on merchant category, transactions arrive pre-coded rather than requiring manual review.

Navan’s traffic light policy system takes this further by automating approval decisions at the point of swipe.

Transactions in the green zone (within policy) auto-approve with no action required. Orange-zone transactions flag for manager review. Red-zone transactions decline at the point of sale.

In other words, routine expenses flow straight through to posting, while exceptions get appropriate scrutiny, without manual review of every transaction.

Integrate Travel, Cards, and Expenses

Disconnected systems require extracting data from multiple sources and manually matching transactions. Integrated platforms flow transaction data automatically from capture through approval to ERP posting, with correct GL codes, department assignments, and supporting documentation attached.

DYWIDAG, a global construction company operating in more than 50 countries, experienced disconnected systems firsthand.

Before adopting Navan, the company’s accounting team manually reviewed reimbursement amounts individually and processed 10–20 manual payments per period. But after implementing Navan, “Team members only have to post one statement per week, and the funds are automatically transferred to the employee’s bank account,” said Andreas Poloczek, Regional CFO. “Thanks to the setup with Navan, the accounting department finally has less pressure at the end of the month.”

Automate Tax and VAT Flagging

VAT treatment differs by country and expense type. Meals, accommodations, and ground transportation each have different reclaim rules, depending on where the expense occurred. Systems that flag VAT-eligible expenses at capture — and apply correct treatment based on merchant location and expense category — reduce compliance verification during close.

Close Faster With Navan

Faster month-end close requires expense data that arrives complete: pre-coded, documented, and ready to post. Navan Expense captures 130+ data points per transaction at the point of swipe, including GL codes, cost centers, and receipts, then flows that data directly to your ERP.

Because Navan integrates travel booking with expense management, finance teams gain visibility into the full travel lifecycle. Get started with Navan to see how this visibility accelerates the month-end close.