“Well, you know, it is month end”, I say, and colleagues nod sympathetically and steer clear for a while. For most non-finance types, it’s a mysterious process that seems to cause a lot of stress. For finance types, it is a beast to be tamed.
By “month end” or “month end close”, I’m referring to the process by which a month (or other period) is brought to an end in the financial system. This means trying to get the numbers as accurate as possible for some sort of eventual output. This could be management accounts, a report for a funder, a VAT return or just the sense of achievement and closure.
It means making sure you have accounted for all the expenditure and income for that month. Depending on the organisation you may also carry out certain “month end” tasks such as calculating depreciation, reconciling the bank and other balance sheet accounts.
In this post I set out a few things to consider which might make a month end less stressful.
Because I was once an auditor, I have an obsession with useless controls. This is where an organisation makes you do something which they think is providing some kind of internal control. However, when you think about it in more depth, you realise it isn’t providing any control at all.
Some examples of useless controls
I had locked myself out of the online portal for an old pension scheme. I rang up and gave my account number. They asked for my full address as a security measure before they reset my account.
Balance sheet reconciliations are a key component of regular accounting to ensure that your transactions are correct. They help you detect issues such as missing transactions or failure of controls or process. This article sets out what they are, what they’re for and how to do them.