How To Create Month End Close Checklist. Start With The Financial Statements Line Items!

Introduction

Creating a month-end close checklist is essential for any accounting team. This tutorial guides you through the process of developing a comprehensive checklist that outlines all necessary tasks to finalize financial statements. This system will help streamline the month-end close process, ensuring clarity and accountability within your team.

Step 1: Set Up Your Google Sheets

1. Open Google Sheets and create a new spreadsheet.
2. Label your columns to include:
   • Task
   • Category
   • Working Days
   • Deadline
   • Owner
   • Reviewer
   • Status

Step 2: Identify Financial Statement Line Items

1. Refer to your financial statements (balance sheet and income statement).
2. Work backward to identify tasks needed for each line item:
   • For example, for cash:
     • Task: Bank reconciliation
   • For accounts receivable:
     • Task: Billing and accounts receivable aging reconciliation
   • Continue this process for all relevant line items.

Step 3: Create Tasks for Each Category

1. Compile a list of tasks based on your financial statement analysis:
   • Cash: Bank reconciliation
   • Accounts Receivable: Billing and aging reconciliation
   • Inventory: Monthly reconciliation
   • Property, Plant, and Equipment: Run depreciation
   • Liabilities: Book vendor invoices
   • Expenses: Accrue expenses and verify invoices
   • Revenue: Reconcile deferred revenue
   • Long-term Debt: Reconcile loan statements
2. Transfer these tasks into your Google Sheets under the "Task" column.

Step 4: Estimate Working Days and Deadlines

1. Determine the number of working days required to complete each task.
   • Example:
     • Bank reconciliation: 1 day
     • Billing: 5 days
2. Set deadlines based on your month-end schedule.
3. Input this data into the "Working Days" and "Deadline" columns of your spreadsheet.

Step 5: Assign Owners and Reviewers

1. Designate an owner and a reviewer for each task:
   • Example:
     • Bank reconciliation: Owner - Tim, Reviewer - Lisa
2. Fill in the "Owner" and "Reviewer" columns accordingly.

Step 6: Create a Status Dropdown Menu

1. Set up data validation for the "Status" column:
   • Options: Not Applicable, In Progress, Done
2. To create the dropdown:
   • Select the cells in the "Status" column.
   • Right-click and select "Data validation".
   • Choose "List of items" and enter your options.
3. Save the settings.

Step 7: Implement Conditional Formatting

1. Highlight the "Status" column for visual tracking.
2. Set conditional formatting rules:
   • If the cell is empty, color it red.
   • If it contains "Done", color it green.
   • If it contains "In Progress", color it yellow.
   • If it contains "Not Applicable", color it green.
3. To apply conditional formatting:
   • Select the cells, right-click, and choose "Conditional formatting".
   • Set rules for each status and choose the corresponding colors.

Step 8: Review and Adjust the Checklist

1. Regularly review the checklist during the month-end close process.
2. Update the status of tasks as they are completed.
3. Communicate with team members to address any bottlenecks or delays.

Conclusion

By following these steps, you will create a structured month-end close checklist that enhances efficiency and accountability within your accounting team. This checklist can be modified and reused for future months, making it a valuable tool for financial management. For additional resources, consider downloading the free close template mentioned in the video.