Fast Close: A Guide to Closing the Books Quickly, Second Edition

By Steven M. Bragg
Copyright © 2009 by John Wiley & Sons, Inc.

Appendix A

Comprehensive Closing
Checklist

PRIOR TO MONTH - END

❒ Review and correct subledger transactions throughout the month

❒ Complete the bank reconciliation every day
❒ Review uncashed checks
❒ Review journal entries:
❒ Verify materiality
❒ Standardize
❒ Convert to recurring entries
❒ Update inventory obsolescence reserve
❒ Determine the lower of cost or market
❒ Calculate overhead allocation bases
❒ Bill recurring invoices
❒ Conduct a preliminary comparison of the shipping log to invoices
issued
❒ Review preliminary rebillable expenses
❒ Update the bad debt reserve
❒ Review preliminary billable hours
❒ Accrue interest expense
❒ Determine pension plan funding
❒ Determine flexible spending account funding
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 182 Comprehensive Closing Checklist

❒ Accrue unpaid wages

❒ Accrue unused vacation time
❒ Accrue travel expenses
❒ Reconcile asset and liability accounts
❒ Update the fixed assets register
❒ Calculate depreciation
❒ Compile preliminary commissions
❒ Review financial statements for errors
❒ Complete selected financial reports in advance

DURING CORE CLOSING PERIOD

❒ Ensure inventory cutoff

❒ Complete all employee/contractor time records
❒ Count and value inventory
❒ Enter late supplier invoices
❒ Complete month- end invoicing
❒ Accrue revenue for unbilled jobs
❒ Accrue commissions on month- end invoicing
❒ Accrue royalties on monthly revenue
❒ Convert division results to reporting currency
❒ Map division results to corporate chart of accounts
❒ Eliminate intercompany transactions
❒ Create and analyze preliminary financial statements
❒ Adjust errors at corporate and division levels
❒ Accrue income tax liability
❒ Finalize and issue financial statements

DEFERRED BEYOND CORE CLOSING PERIOD

❒ Defer the mailing of invoices

❒ Defer the invoicing of rebillable expenses
❒ Complete bank reconciliation based on final bank statement

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 During Core Closing Period 183

❒ Calculate and review closing metrics

❒ Determine improvement targets for next month
❒ Initiate programming changes for further improvements
❒ Review accounting systems for standardization opportunities
❒ Update closing procedures

The following additional steps are required for a company issuing

quarterly 10-Q or annual 10-K reports to the Securities and Exchange
Commission (SEC), which occurs after the financial statements have been
completed:

PRIOR TO MONTH - END

❒ Complete portions of SEC - and GAAP- required disclosures

DURING CORE CLOSING PERIOD

❒ Write 10-Q/10-K report

❒ Double- check contents of the 10-Q/10-K report
❒ Complete remaining SEC - and GAAP- required disclosures
❒ Prepare supporting documentation for footnotes and disclosures
❒ Prepare analytics and assemble documents requested by auditors
❒ Obtain legal review of 10-Q/10-K
❒ Obtain officer certifications of 10-Q/10-K
❒ Obtain audit committee approval of 10-Q/10-K
❒ Prepare report for submission to the SEC
❒ Obtain final approval from auditors for filing
❒ File the report with the SEC ’s EDGAR system

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