Best Practices

Guidelines, automation strategies, and troubleshooting for period-end closing procedures.

---

Close Calendar Template

Monthly Close Calendar

CLOSE CALENDAR TEMPLATE
═══════════════════════════════════════════════════════════════════

ORGANIZATION: ________________________
FISCAL PERIOD: ______________________

DAY   DATE     TASK                           OWNER        STATUS
───   ────     ────                           ─────        ──────

PRE-CLOSE PHASE (Day -5 to -1)
-5    ____     Send close calendar            Controller   □
-5    ____     Review prior month items       Accounting   □
-3    ____     AP invoice cut-off reminder    AP Manager   □
-3    ____     AR billing deadline reminder   AR Manager   □
-1    ____     Final transaction entry        All          □
-1    ____     Bank reconciliation            Treasury     □
-1    ____     Run depreciation               FA Team      □

CLOSE PHASE (Day +1 to +5)
+1    ____     Lock A/R                       Controller   □
+1    ____     Lock A/P                       Controller   □
+2    ____     Post accruals                  Accounting   □
+2    ____     Post deferrals                 Accounting   □
+2    ____     Lock All                       Controller   □
+3    ____     FX revaluation                 Treasury     □
+3    ____     IC adjustments                 Corporate    □
+4    ____     Date/period mismatches         Accounting   □
+4    ____     Negative inventory             Inventory    □
+5    ____     GL audit numbering             Controller   □
+5    ____     Close period                   Controller   □

POST-CLOSE PHASE (Day +6 to +7)
+6    ____     Generate financials            Reporting    □
+7    ____     Distribute reports             Controller   □
+7    ____     Close review meeting           CFO          □

Prepared by: ____________  Date: ____________
Approved by: ____________  Date: ____________

---

Role Assignments

Recommended Segregation of Duties

Role	Responsibilities	System Role
Controller	Approve close, lock periods, final review	Full Access
AR Manager	AR transactions, customer reconciliation	AR Manager
AP Manager	AP transactions, vendor reconciliation	AP Manager
Treasury	Bank recon, FX management	Treasury
Corporate Accounting	IC, consolidation, adjustments	Accountant
Fixed Assets	Depreciation, asset management	Fixed Assets
Inventory	Inventory counts, negative review	Inventory Mgr

Permission Requirements

CLOSE-RELATED PERMISSIONS
───────────────────────────────────────────────────────────

Controller Role:
├── Accounting Period        Full
├── Period Close Tasks       Full
├── Reopen Accounting Period Full
├── GL Audit Numbering       Full
└── All Financial Reports    Full

Accountant Role:
├── Accounting Period        View
├── Journal Entry            Create/Edit
├── Reconciliation           Full
└── Financial Reports        View

Manager Role:
├── Accounting Period        View
├── Lock A/R or A/P          Full
├── Approve Transactions     Full
└── Reports (Module)         Full

---

Automation Opportunities

Recurring Journal Entries

AUTOMATED ADJUSTMENTS
═══════════════════════════════════════════════════════════════════

Setup: Transactions > Financial > Create Memorized Transaction

Example - Monthly Rent Accrual:
┌────────────────────────────────────────────────────────┐
│ Name:           Monthly Rent Accrual                   │
│ Frequency:      Monthly                                │
│ Day of Month:   Last Day                              │
│ Start Date:     01/31/2026                             │
│ End Date:       12/31/2026                             │
│                                                        │
│ Lines:                                                 │
│   Rent Expense          $10,000 Dr                    │
│   Accrued Rent                  $10,000 Cr            │
│                                                        │
│ ☑ Create Automatically                               │
│ ☑ Email notification when created                    │
└────────────────────────────────────────────────────────┘

Common Recurring Entries:
  • Rent/lease accruals
  • Insurance amortization
  • Loan interest accruals
  • Subscription amortization
  • Management fee allocations

Scheduled Reports

AUTOMATED CLOSE REPORTS
───────────────────────────────────────────────────────────

Setup: Reports > Financial > [Report] > Schedule

Recommended Scheduled Reports:

1. Daily During Close:
   • Bank Reconciliation Status
   • Pending Approvals
   • Date/Period Mismatches

2. Close Completion:
   • Trial Balance
   • Balance Sheet
   • Income Statement
   • AR Aging
   • AP Aging

3. Monthly Distribution:
   • Board Package
   • Management Financials
   • Variance Analysis

Workflow Automation

CLOSE WORKFLOW AUTOMATION
───────────────────────────────────────────────────────────

Workflow: Close Period Reminder

Trigger:
  Date = Last day of month

Actions:
  1. Email AR Manager: "Complete all invoicing"
  2. Email AP Manager: "Complete all bill entry"
  3. Email Controller: "Close begins tomorrow"

─────────────────────────────────────────────────────────────

Workflow: Approval Escalation

Trigger:
  Transaction pending > 2 days
  AND Period = Current or Prior

Actions:
  1. Email approver: "Approval needed for close"
  2. If still pending day 3: Email manager
  3. If still pending day 5: Email controller

---

Common Issues and Troubleshooting

Transaction Issues

Issue	Symptom	Resolution
Can't post transaction	"Period is closed" error	Reopen period or change date
Transaction in wrong period	Month-end cut-off missed	Edit date/period if allowed
Duplicate entry	Double expense/revenue	Void duplicate, adjust if needed
Missing transaction	Balance doesn't reconcile	Research and enter missing item

Reconciliation Issues

Issue	Symptom	Resolution
Bank won't reconcile	Difference remains	Check unrecorded fees/interest
AR aging ≠ GL	Amounts don't match	Find unapplied payments/credits
AP aging ≠ GL	Amounts don't match	Check for duplicate vendors
Inventory variance	Book ≠ physical	Investigate and adjust

Close Process Issues

Issue	Symptom	Resolution
Can't lock module	Error message	Clear pending transactions
Mismatch won't clear	Item stays on list	Transaction may need approval
IC out of balance	Elimination error	Review IC balance report
FX won't revalue	Task incomplete	Verify exchange rates entered

---

Close Process Optimization

Reducing Close Time

CONTINUOUS CLOSE STRATEGIES
═══════════════════════════════════════════════════════════════════

STRATEGY 1: Daily Activities
─────────────────────────────
□ Real-time bank reconciliation
□ Same-day AP entry
□ Daily AR cash application
□ Continuous revenue recognition

STRATEGY 2: Weekly Activities
─────────────────────────────
□ Weekly reconciliations (not monthly)
□ Rolling intercompany review
□ Weekly accrual estimates
□ Proactive mismatch resolution

STRATEGY 3: System Automation
─────────────────────────────
□ Recurring entries for standard accruals
□ Scheduled saved searches for exceptions
□ Automated notifications
□ Workflow-driven approvals

RESULT:
┌─────────────────────────────────────────────────────────┐
│ Traditional Close:  10 business days                   │
│ Optimized Close:    3-5 business days                  │
│ Continuous Close:   1-2 business days                  │
└─────────────────────────────────────────────────────────┘

Bottleneck Identification

COMMON BOTTLENECKS
───────────────────────────────────────────────────────────

1. LATE VENDOR INVOICES
   Problem: AP can't close without all bills
   Solution: 
     • Earlier cut-off (Day -3)
     • Accruals for missing bills
     • Vendor portal for faster submission

2. APPROVAL DELAYS
   Problem: Transactions stuck in queue
   Solution:
     • Earlier deadline
     • Escalation workflow
     • Delegation during travel

3. BANK RECONCILIATION
   Problem: Waiting for bank statement
   Solution:
     • Online banking access
     • Daily reconciliation
     • Prior-day processing

4. SUBSIDIARY DELAYS
   Problem: One sub delays all
   Solution:
     • Staggered close calendar
     • Dedicated close resource
     • Earlier sub deadlines

---

Audit Trail and Documentation

Close Documentation

RECOMMENDED DOCUMENTATION
═══════════════════════════════════════════════════════════════════

FOR EACH CLOSE:

1. RECONCILIATION PACKAGE
   □ Bank reconciliations (all accounts)
   □ AR aging with GL tie-out
   □ AP aging with GL tie-out
   □ Fixed asset register
   □ Inventory valuation

2. ADJUSTMENT SUPPORT
   □ Accrual calculations
   □ Deferral schedules
   □ Estimate documentation
   □ Journal entry approvals

3. CHECKLIST EVIDENCE
   □ Completed close checklist
   □ Date/period mismatch resolution
   □ Negative inventory resolution

4. SIGN-OFF
   □ Preparer signature
   □ Reviewer signature
   □ Controller approval

Storage: File Cabinet > Close Documentation > [Year] > [Month]

Audit Considerations

Item	Auditor Expectation	Best Practice
Cutoff	Proper period allocation	Document cutoff date
Completeness	All transactions captured	AR/AP confirmations
Accuracy	Correct amounts	Reconciliation workpapers
Existence	Assets/liabilities real	Bank confirmations
Presentation	GAAP compliance	Review financial statements

---

Key Performance Indicators

Close Metrics

CLOSE PERFORMANCE METRICS
═══════════════════════════════════════════════════════════════════

TIMING METRICS:
  Close Days           Target: ≤ 5 business days
  First Draft Days     Target: ≤ 3 days
  Report Distribution  Target: Day +5

QUALITY METRICS:
  Post-Close Adjustments    Target: ≤ 2 per period
  Reconciliation Differences Target: $0
  Date/Period Mismatches    Target: 0

EFFICIENCY METRICS:
  Manual Journal Entries    Target: ≤ 10 per period
  Approval Exceptions       Target: 0
  Reopened Periods          Target: 0 per quarter

TRACKING:
  ┌─────────────────────────────────────────────────────┐
  │ Month    Close Days  Adjustments  Mismatches       │
  │ ─────    ──────────  ───────────  ──────────       │
  │ Jan      5           1            0        ✓       │
  │ Feb      4           0            0        ✓       │
  │ Mar      6           3            2        ⚠       │
  └─────────────────────────────────────────────────────┘

---

Checklists Summary

Pre-Close Checklist

□ Close calendar distributed
□ Prior month items cleared
□ AP cut-off communicated
□ AR billing complete
□ Bank statements received
□ Depreciation run
□ Inventory counts complete

Close Checklist

□ Lock A/R
□ Lock A/P
□ Lock Payroll
□ All adjustments posted
□ Lock All
□ FX revaluation
□ IC adjustments
□ IC eliminations
□ Date/period mismatches resolved
□ Negative inventory resolved
□ GL audit numbering
□ Period closed

Post-Close Checklist

□ Financial statements generated
□ Variance analysis complete
□ Reports distributed
□ Documentation filed
□ Lessons learned documented
□ Next month preparation started

---

Related Topics

• Month-End Close - Detailed procedures
• Year-End Close - Annual tasks
• Period Close Checklist - NetSuite tasks