A monthly close is the work of making last month's books complete and correct, then locking them so the numbers you read don't change under you.
What a close is
Every month, money moves through your bank account, your card, your membership platform and payroll. A close takes all of that activity, puts each dollar in the right place, checks it against the statements, and then calls the month done. Once it's done, your P&L, short for profit and loss statement, and your Balance Sheet for that month are numbers you can trust and compare.
Without a close, your books are a running draft. The numbers shift every time someone fixes a transaction from three months ago. That's fine for a rough look. It's not fine when you're deciding whether to hire, raise prices, or pay yourself more.
What a bookkeeper does each month
Here's what a good close includes, in the order the work happens.
- Wait for every statement for the month to post
- Categorize every transaction to your DPC chart of accounts
- Reconcile each bank and card account to its statement
- Match membership deposits to what your platform says you earned
- Check payroll entries against your payroll reports
- Review the P&L for anything that looks off
- Send you the P&L and Balance Sheet
Categorizing means tagging each transaction, like rent, supplies or membership dues. Reconciling means proving the books match the bank to the penny, so nothing's missing and nothing's counted twice. If that term is new, it's worth a few minutes on what reconciled means, because every other number sits on top of it.
Membership dues get extra care. If your platform deposits money net of fees, refunds and failed payments, the deposit in your bank won't match the dues your members paid. A good close records the dues and the fees separately so your revenue is right and your costs are visible. Our post on why your Hint report doesn't match your bank explains why the two don't line up.
The review step is where the bookkeeper looks at the month as a whole. Did revenue drop for no clear reason? Is there an expense you haven't had before? Is something sitting in the wrong category?
Why numbers arrive by the 15th
A lot of owners I talk to ask why they can't have last month's numbers on the 1st. The short answer is that the month isn't finished on the 1st.
Bank and card statements post a few days after the month ends. If your card statement closes partway through the month, its activity for the rest of the month shows up on the next one. Your membership platform's last payouts of the month may still be landing. Payroll for the last week might not hit until the next pay date. If we closed on the 1st, we'd be closing on partial data, and you'd get numbers that change a week later.
So we give the statements time to arrive, do the work, ask our questions, and get you finished numbers by the 15th. Two weeks is the tradeoff that gets you numbers you can make decisions on.
How you can make it go faster
What slows a close down is usually waiting on answers. Here's what helps.
Answer our questions within a day or two. Usually it's a handful of transactions we can't identify from the bank description alone. Send any statement we ask for as soon as it posts. Keep personal spending off the business card so we're not sorting it out. And if something unusual happened, like a loan, a big equipment purchase, or money you put in from personal savings, tell us that month instead of letting us find it.
Do those things and your close goes smoothly. Your numbers arrive on time, and they hold still once they do.
Common questions
Can I see numbers before the close is done?
You can look at your bank balance anytime. The P&L before the close is a draft, so I'd wait for the finished version before making decisions on it.
What if you find a mistake in a closed month?
We fix it and tell you what changed and why. Closing a month doesn't mean errors can't be corrected. It means changes are deliberate and you know about them.
Does my CPA use the monthly close?
Yes. Twelve clean, closed months are what your CPA works from at year end, so they can file without cleanup first.
Want your books closed every month?
Every DPC Bookkeeper level includes a monthly close, reconciled accounts, and your P&L and Balance Sheet by the 15th. If you want books you can trust, apply to work with us.