Month-end close process flowchart and SOP template (BPMN)
This month-end close process is a BPMN diagram of how an accounting team closes the books each month. It has three lanes, **Accounting**, **Controller** and **Finance Manager**, and two gateways: whether every account is reconciled, and whether the controller approves the entries. Below the diagram is a short SOP you can copy. It is for controllers, accounting managers and small finance teams.
Example: BPMN diagram for the month-end close: click to open it in the editor and change it.
Lanes and steps in order
- Month ends (Accounting, start event): the last day of the month.
- Record accruals & prepaids (Accounting): accrued expenses, prepaid expenses, depreciation and recurring entries are posted.
- Reconcile bank accounts (Accounting): each bank account is matched to its statement.
- Reconcile AR, AP & inventory (Accounting): each subledger is matched to the general ledger.
- Prepare trial balance (Accounting): the trial balance is run to check that every account ties out.
- All reconciled? (gateway): No goes to Investigate & post adjustments, then back to reconciling. Yes goes to the controller.
- Review entries & reconciliations (Controller): the controller checks the entries and their support.
- Approved? (gateway): No sends the work back to Accounting for rework. Yes goes to Lock period in ERP, which updates the General ledger.
- Review financial statements (Finance Manager): statements are compared with budget and the prior month.
- Send reporting package (Finance Manager): the package goes to leadership, and the month is closed.
Hand-offs and decision points
The two gateways are the quality gates of the close. Nothing reaches the controller until every account is reconciled, and nothing is locked until the controller approves. Locking the period in the ERP stops late entries from changing numbers that have already been reported.
Where this process usually slows down
- Reconcile AR, AP & inventory: inventory counts and late supplier invoices hold up the subledgers.
- Investigate & post adjustments: small differences carried from earlier months take hours to trace. Clear them every month.
- Review entries & reconciliations: one controller reviewing everything at the end. Review reconciliations as they finish instead.
How to adapt it for your company
- Add a Payroll lane for payroll accruals and a Tax lane for sales tax and VAT returns.
- Add intercompany reconciliation and eliminations if you have more than one entity.
- Put a target business day on each step, such as accruals by day 2 and the package by day 5.
- Add a quarter-end and year-end branch for extra steps such as audit schedules.
Tip: Keep a close checklist with an owner and a due day for every task, and start the next month's checklist from the last one.
Standard operating procedure
Purpose: Close the books accurately and on schedule every month, with reviewed reconciliations behind every balance.
Scope: Starts on the last day of the month. Ends when the period is locked and the reporting package is sent.
Roles
- Accounting: Records accruals, reconciles accounts and prepares the trial balance.
- Controller: Reviews entries and reconciliations, and locks the period.
- Finance Manager: Reviews the financial statements and sends the reporting package.
Procedure
- Accounting: Record accruals, prepaid expenses, depreciation and other recurring journal entries by business day 2.
- Accounting: Reconcile every bank account to its statement.
- Accounting: Reconcile the AR, AP and inventory subledgers to the general ledger.
- Accounting: Prepare the trial balance and check that every account is reconciled.
- Accounting: Investigate any unreconciled difference and post adjusting entries with support attached, then reconcile again.
- Controller: Review the journal entries and reconciliations. Return anything unsupported to Accounting for rework, with a note.
- Controller: Lock the period in the ERP so no more entries can be posted to it.
- Finance Manager: Review the income statement, balance sheet and cash flow against budget and last month, and explain big variances.
- Finance Manager: Send the reporting package to leadership by the agreed close day, for example business day 5.
Process owner: Controller
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Frequently asked questions
What are the steps in the month-end close process?
Record accruals and recurring entries, reconcile bank accounts and subledgers, post adjustments, prepare the trial balance, have the controller review and approve, lock the period and send the financial statements.
How long should a month-end close take?
Many small and mid-sized companies aim for 5 to 10 business days. The fastest teams reconcile during the month so the close itself is mostly review.
Who is responsible for the month-end close?
The controller usually owns the close. Staff accountants do the entries and reconciliations, and a finance manager or CFO reviews the statements.
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