Month-End Close Checklist for QuickBooks Online: What an Outsourced Close Covers#
Most accounting firms do not struggle with the idea of a month-end close. They struggle with the same thing every month: the close for fifteen clients lands in the same week, and each file has its own loose ends. Handing the close to an offshore team only works if both sides agree on the sequence, the cut-off and who checks what. This article sets out that sequence as we work it inside the client's QuickBooks Online file.
The principle: order matters#
Each step feeds the next. Reconciling a bank account before the uncategorised items are cleared just moves the problem. Running an aging report before cash is applied gives a wrong receivable. So we work in a fixed order and record what was done at each step.
The close sequence#
1. Confirm the cut-off and the inputs. We agree the period end, the date by which statements and documents will arrive, and what is still missing. Missing items go on a list straight away, not at the end.
2. Bank and credit card reconciliations. Every bank and credit card account is reconciled to the statement for the period. The statement balance must match the reconciled balance. Anything not matched is listed with a reason.
3. Loan reconciliations. Loan balances are compared with lender statements. Principal and interest are split correctly, and differences are listed.
4. Undeposited funds. Payments received but not yet deposited are matched to bank deposits and cleared. A balance left in undeposited funds is a sign that a deposit was recorded twice or never linked.
5. Uncategorised and "Ask My Accountant" balances. Transactions sitting in uncategorised accounts or in "Ask My Accountant" are coded where the support is clear. Where it is not, they stay visible on a question list for you. We do not move a doubtful item into a normal expense account to make the balance zero.
6. Accounts payable review. The payables aging is reviewed for duplicates, bills with no support, old items and vendor credits not applied.
7. Accounts receivable review. The receivables aging is reviewed for unapplied payments, credits and old balances. Whether an old balance is collectable, or should be written off, is your decision.
8. Accruals and prepaids. Accruals, prepaid expenses and similar entries are recorded on the basis the firm sets. If the client is on a cash basis for some items and accrual for others, we follow the written instruction. We do not choose the basis.
9. Payroll and sales tax recorded. Payroll totals and sales tax amounts are recorded from the reports you send, for your preparer. We do not process payroll or file sales tax returns.
10. Reasonableness review. The profit and loss and balance sheet are compared with the prior month and with the same month last year if available. Large swings are explained in notes or put on the question list.
11. Closing the period. After your review, the books are closed with a closing date in QuickBooks Online, so later changes to the period are visible. We set the date when the firm tells us to.
12. Summary. A written summary of every adjustment, the open items and the final reconciled balances goes back with the reports.
Illustrative close calendar#
This is an illustration only. Your calendar depends on when statements arrive and when your team reviews.
| Working day | Work |
|---|---|
| 1 to 2 | Collect statements and reports, confirm cut-off, list missing items |
| 2 to 3 | Bank, credit card and loan reconciliations |
| 3 to 4 | Undeposited funds, uncategorised and "Ask My Accountant" clearing |
| 4 to 5 | Payables and receivables aging review, accruals and prepaids |
| 5 to 6 | Reasonableness review, Chartered Accountant review, summary prepared |
| 7 | Firm reviews, answers questions, closing date set |
A small worked example#
All figures are illustrative round numbers.
| Item | Amount |
|---|---|
| Bank statement closing balance | 52,000 |
| Less: cheques issued, not yet cleared | (3,000) |
| Add: deposit in transit | 1,000 |
| Adjusted bank balance | 50,000 |
| QuickBooks Online reconciled balance | 50,000 |
| Difference | 0 |
If the difference had been 200, we would not post a plug entry. We would look for a missed fee, a duplicate or a date mismatch, and list the item if it stayed open.
What can be handed to an offshore team#
- All reconciliations and the clearing of suspense-type balances.
- Aging reports and the preparation of review notes.
- Recording accruals and prepaids on your instruction.
- Preparing the reports and the summary of adjustments.
- Preparing the file for the closing date.
What stays with the firm#
- Choosing the accounting basis and policies.
- Judgement calls on old balances, write-offs and unusual items.
- Client communication.
- Final review and setting the closing date.
- Tax returns and tax advice.
What the reviewer at the firm checks#
| Check | What to look at |
|---|---|
| Reconciliations | Statement balances agree; reconciliation reports are attached |
| Suspense balances | Undeposited funds and uncategorised accounts are zero or explained |
| Question list | Every open item has an owner |
| Adjustments | The written summary matches the changes in the file |
| Accruals | Applied on the basis you set |
| Variances | Large movements have a note |
| Closing date | Set only after sign-off |
What to send#
- Read access, or invited user access, to the QuickBooks Online file.
- Statements for banks, cards and loans, unless feeds are connected.
- Payroll reports and sales tax reports for the period.
- Your written close policy: basis, accrual thresholds, naming rules.
- Prior-month close notes, if any.
What comes back#
- Reconciliation reports for each account.
- Balance sheet and profit and loss for the period.
- Aging reports for payables and receivables.
- A written summary of adjustments and an open-items list.
Work is reviewed by a Chartered Accountant before it is returned to you.
Frequently asked questions#
Can you close the books ourselves, or only prepare them? We prepare the close and put the file in a state ready for closing. The closing date is set when your firm confirms.
What if documents arrive late? The item stays on the open list and the close goes ahead for everything else. We note the item in the summary so it is not lost.
Do you adjust the numbers to make reconciliations agree? No. Differences are traced and listed. They are not hidden in a plug entry.
Can we change the sequence for a particular client? Yes. Send us the client's close policy and we work to it.
Where to go next#
If you run an accounting firm, our page on back-office support for CPA firms describes how a client file is sent over. The routine work itself is covered under monthly bookkeeping and reconciliation.
