Monthly Closing: Complete Process and Best Practices for Companies
By Hugo Ribeiro, Certified Accountant · Member of the Order of Certified Accountants · HVR Business Consulting
Monthly Close: Complete Process and Best Practices for Businesses Introduction: The Strategic Importance of the Monthly Close in Business Management The monthly close is a fundamental pillar of any company's financial and accounting management. More than a mere formality, it represents a systematic process of collecting, validating, reconciling, and reporting all financial and economic operations that occurred in a given month. Its correct execution allows for a faithful and up-to-date picture of the organisation's financial health, serving as a basis for strategic decision-making and for stri…
Key Takeaways
Ideal timeline: documents by day 5, submission by day 10, closing by day 15
Mandatory bank reconciliation: accounting balance = statement balance
Base reports: trial balance, income statement, cash flow map
Always validate variations greater than 10% vs previous month
Document checklist prevents delays and errors in closing
FAQ
What is the ideal deadline for submitting monthly closing documents?
Documents should be collected by the 5th of the following month and sent to the accountant by the 10th, allowing processing and compliance with tax deadlines by the 20th.
What is bank reconciliation?
It is the verification that the accounting balance matches the bank statement balance. Differences must be identified (checks in transit, pending transfers, fees) and justified.
What reports should I receive in the monthly closing?
Base reports include: trial balance (balance overview), income statement (profit/loss), cash flow map and customer analysis (balance aging).
What are the most common errors in monthly closing?
Late document submission, incomplete documents (without NIF or date), lack of bank reconciliation, mixing personal expenses and not communicating special events to the accountant.
How often should I meet with my accountant?
A monthly meeting is recommended for results analysis and improvement opportunities. At minimum, there should be a quarterly follow-up meeting.