It’s month-end. Again.
And you’re doing the same thing you did last month. Chasing numbers. Reconciling differences. Finding errors. Fixing them.
It takes days. Maybe a week. By the time you’re done, the month is half over.
Here’s how to fix that.
Why month-end takes so long
Let’s be honest about why closing is slow.
Waiting for data
Sales didn’t send their numbers. Warehouse hasn’t finished the count. Purchasing hasn’t entered all the invoices.
You can’t close until everyone else is done.
Disconnected systems
Inventory is in one system. Sales in another. Accounting in a third. Nothing matches automatically.
You spend days making them agree.
Finding and fixing errors
Every month you find the same kinds of mistakes. Wrong account codes. Missing entries. Duplicate transactions.
But you don’t find them until you try to close. Then it’s fire-fighting.
Manual processes
Exporting from one system. Importing to another. Copying and pasting. Manual journal entries.
Manual work takes time and creates errors.
Perfectionism
Sometimes we spend too long chasing small differences. An hour finding $50. Was that worth it?
What a fast close looks like
The best finance teams close in 1-2 days. Not because they work harder. Because they work smarter.
Before month-end:
- All transactions are already recorded
- Reconciliations are done throughout the month
- Errors are caught and fixed as they happen
At month-end:
- Quick review, not data entry
- Final reconciliations already mostly done
- Reports generated in minutes
The secret: they don’t do everything at month-end. They spread the work throughout the month.
How to close faster
1. Get integrated systems
The single biggest improvement.
When inventory, sales, and accounting share the same database, you don’t reconcile them. They’re already the same.
When you invoice a customer, the accounting entry happens automatically. When you receive goods, inventory and AP update together.
No waiting for data from other departments. No making systems agree. They already do.
2. Close activities throughout the month
Don’t save everything for month-end.
Weekly:
- Bank reconciliation
- Review outstanding AP invoices
- Check customer payment status
As they happen:
- Record transactions immediately
- Enter invoices when received
- Process credits and adjustments
When you do this work weekly, month-end becomes a quick review instead of a massive catch-up.
3. Create a closing checklist
Write down every step in your close process. In order.
Who does what. When they do it. What they need.
Now everyone knows the plan. You can see where delays happen. You can improve step by step.
4. Set deadlines and stick to them
Sales reports due by day 2. Inventory counts done by day 3. All invoices entered by day 1.
Make these deadlines clear. Hold people accountable.
If someone is always late, find out why. Fix the root cause.
5. Automate repetitive tasks
If you do the same journal entry every month, automate it. If you generate the same reports, schedule them.
Look at what you do every month. How much is truly unique? How much is just repetitive work?
6. Set materiality thresholds
You don’t need to find every penny.
If your business does $1 million a month, spending an hour to find $25 doesn’t make sense.
Set a threshold. Below that, book it to a variance account and move on.
7. Fix problems at the source
Every error you find at month-end is a process problem.
Don’t just fix the number. Ask: why did this happen? How do we prevent it next time?
Track common errors. Fix them in your processes. Over time, you’ll have fewer problems to deal with.
The closing checklist
Here’s a sample checklist for distribution businesses.
Before month-end (ongoing)
- All sales invoiced within 24 hours
- All receipts entered same day
- Bank reconciliation done weekly
- Customer payments applied promptly
- AP invoices entered when received
Day 1
- Confirm all sales invoiced
- Run inventory variance report
- Review open purchase orders
- Complete bank reconciliation
- Review aged receivables
Day 2
- Inventory adjustments recorded
- Accruals for known expenses
- Review AP for completeness
- Depreciation entries
- Inter-company transactions
Day 3
- Final review of all accounts
- Management reports generated
- Period closed in system
- Issues documented for next month
Adapt this to your business. The key is having a clear process.
What integrated software changes
Let me be specific about what happens when your systems are connected.
Without integration:
- Export sales data from sales system
- Import to accounting
- Check that totals match
- Fix discrepancies
- Manual AR entries
- Repeat for inventory and purchasing
With integration:
- Review reports
- Done
Not quite that simple, but close. When all transactions create automatic accounting entries, there’s nothing to reconcile.
Common obstacles (and solutions)
“Sales doesn’t get invoices in on time”
Make invoicing part of the sales process, not a separate step. Sales can’t mark an order complete until it’s invoiced.
Or have operations create invoices immediately when goods ship.
”Warehouse counts take too long”
Don’t count everything at month-end. Implement cycle counting. Count portions throughout the month.
By month-end, you’ve already counted most things. Only a quick verification needed.
”AP invoices arrive late”
Accrue for expected invoices. If you received goods but not the invoice, book the estimated expense.
Adjust when the actual invoice arrives.
”Management wants perfect numbers”
Have a conversation about materiality. Explain the trade-off between speed and perfection.
A $50 variance in a $1 million business is 0.005%. That’s accurate enough.
Measuring improvement
Track your close time. Write it down each month.
- Days to close
- Hours spent by finance team
- Number of errors found
- Adjustments made after initial close
Set targets. Celebrate progress.
If closing takes 7 days now, aim for 5 next quarter. Then 3.
The bottom line
Fast closing isn’t about working harder at month-end. It’s about working smarter all month long.
Integrated systems. Ongoing reconciliation. Clear processes. Fixed deadlines.
Do these things and month-end becomes a quick review instead of a marathon.
Your finance team will be happier. Your management will get numbers sooner. And you’ll start the new month with a clean slate instead of an overhang of close work.
Want to close faster? Get a demo and see how Magnofy’s integrated accounting helps distributors close the books quickly.
