Monthend

Month-end is the closing activity that takes place at the end of a calendar or fiscal month to produce finalized financial data for that period. It is a key part of accounting and financial reporting, used for internal management information as well as external reporting. While calendar month-end occurs on the last day of the month, many organizations also operate on a fiscal month-end based on their chosen accounting period.

The month-end close typically involves ensuring that all transactions for the period have been recorded in the correct period, posting adjusting entries, and reconciling balance sheet accounts. Common tasks include accruals and deferrals, depreciation and amortization, payroll adjustments, intercompany eliminations, revenue recognition cut-offs, and inventory reconciliations. The goal is to present an accurate, complete view of the period’s financial position and performance.

Outputs of the close include a trial balance, adjusting journal entries, and finalized financial statements and management reports. Variance analysis against budgets, forecasts, and prior periods is often prepared at this time to support decision making. Timelines vary by organization but most aim to complete the close within a few days of the period end, allowing time for review and signoff.

Controls and governance are central to the month-end process. Organizations maintain documentation, audit trails, and reconciliations to support accuracy and accountability. Information technology systems, including enterprise resource planning (ERP) platforms, play a large role in automating postings and consolidations, while adherence to internal controls and, where applicable, SOX requirements helps mitigate errors and fraud.