Definition
Month-end close is the set of tasks accountants complete after each month ends to make sure that month's books are complete and correct, then lock them against further changes.
What is month-end close, step by step?
Typical steps include posting outstanding entries, reviewing accruals such as goods received not invoiced, reconciling bank, receivables and inventory to the ledger, checking intercompany balances, reviewing the trial balance and closing the period. A fast close depends on transactions being posted as they happen, not in a rush at month-end.
Example: a trading company aims to close by the fifth working day, with drafts posted by day 2, GRNI and stock reconciled by day 3 and the period closed by day 5.
Closing the period stops anyone backdating entries into it.