# Month-end close readiness check

Canonical: https://finbryn.com/us/tools/month-end-close-readiness

Updated October 8, 2026

Finbryn provides a free 17-question month-end close readiness check for US small business owners. It scores bank reconciliations, suspense accounts, accruals, payroll and sales tax balances, and review from 0 to 100, then lists the fixes to make first. Dollar limits such as the $2,500 de minimis safe harbor come from IRS sources checked October 7, 2026.

17 questions, about 5 minutes. Answer them on the page for an instant score from 0 to 100.

## Cash and reconciliations

### 1. How often are your bank and credit card accounts reconciled to their statements in your accounting software?

Every other number in the books depends on cash being right, so this is the first thing a reviewer checks.

- Every month, every account, with the reconciliation report saved
- Every month, but one or two accounts (often a card or savings account) get skipped
- Every few months, only at year end, or not at all

### 2. At month end, what's left in Uncategorized Income, Uncategorized Expense, Ask My Accountant or other suspense accounts?

Anything parked in a suspense account is missing from the profit and loss, so a reviewer won't sign off a month until it's cleared.

- Nothing. Every transaction is coded before the month is closed
- A few recent items, cleared at the next close
- A balance that rolls forward month to month, or nobody has checked

### 3. What's left at month end in Undeposited Funds (Payments to deposit in some QuickBooks Online files) or other clearing accounts?

Old items in a clearing account often mean a sale was recorded twice or a deposit was never matched, which overstates income and cash.

- Only payments from the last few days that haven't reached the bank yet
- We don't use one. Every payment is matched straight to its bank deposit
- Some older items, but we know what each one is
- A large or old balance nobody can explain

## Revenue and receivables

### 4. At month end, is your accounts receivable aging reviewed, and does its total match Accounts Receivable on the balance sheet?

An aging that nobody reviews, or that disagrees with the balance sheet, can hide unapplied payments and invoices that will never be paid.

- Yes. It ties every month and we follow up on invoices over 60 days
- We don't invoice. Customers pay at the time of sale
- It matches, but old unpaid invoices sit there for months
- Nobody reviews the aging, or it doesn't match the balance sheet

### 5. When work happens in one month but the invoice or bill is dated the next, which month does it land in?

Cutoff decides whether each month's profit reflects the work done that month or just the timing of paperwork.

- The month the work was done or the goods shipped, with accruals for anything not yet billed
- We keep cash-basis books, so income and costs land when the money moves
- Whatever date the invoice or bill carries, with no month-end adjustment
- It varies from month to month

### 6. If you take payments through Stripe, Square, Shopify Payments or PayPal, how are those sales recorded?

Payment platforms pay out the net after fees and refunds, so recording only the payout understates both sales and fees.

- Gross sales, fees and refunds are recorded separately, and each payout ties to its bank deposit
- We don't take payments through these platforms
- The net payout is recorded as income
- Payouts are recorded irregularly, or some never make it into the books

## Bills and accruals

### 7. How are supplier bills handled?

An accounts payable aging that ties to the balance sheet shows what you owe and catches bills that were paid or recorded twice.

- Bills are entered when they arrive, and the A/P aging ties to the balance sheet every month
- We record expenses when we pay them and don't track open bills
- Bills are entered, but the A/P aging shows bills we've already paid

### 8. At month end, do you record costs incurred but not yet billed, and spread prepaid items like annual insurance over the months they cover?

Accruals and prepaids keep one large payment from making a single month look like a loss and the following months look better than they are.

- Yes, for every significant item, from a standing accrual and prepaid schedule reviewed at every close
- Only at year end, or only when someone remembers
- No, every cost hits the month it's paid

## Payroll and sales tax

### 9. After each payroll, do the payroll liability accounts match your payroll provider's reports and clear when the taxes are paid?

Payroll liabilities that never clear can point to a missed tax deposit, and late deposits carry IRS penalties and interest.

- Yes, they tie to the provider's reports every month and clear after each deposit
- No employees on payroll
- Payroll is booked as one net-pay expense, with no liability accounts
- Liability balances keep growing or go negative, and nobody knows why

### 10. If you collect sales tax, does Sales Tax Payable in the books match the returns you've filed and the payments you've made?

Sales tax you collect belongs to the state, so a payable that doesn't tie usually means sales or expenses are off as well.

- Yes, it's tied to each filed return every period
- We don't sell anything taxable, or we've confirmed we have no sales tax to collect
- Roughly, but nobody has tied it out recently
- Sales tax is mixed into sales or expenses, or the balance doesn't match at all

## Inventory, loans and fixed assets

### 11. If you sell products, how is inventory handled at month end?

Cost of goods sold depends on what's left in stock at month end, so monthly margins are only as good as the inventory figure behind them.

- It's tracked in the software or counted, and the balance sheet figure is checked at each close
- We don't sell products or hold inventory
- Inventory is adjusted only at year end, so monthly cost of goods sold is just purchases
- Inventory isn't counted or recorded in the books at all

### 12. Do loan and credit line balances in the books match the lender's statements, with each payment split between principal and interest?

Only the interest is an expense, so booking whole payments as expenses understates profit and leaves the loan balance wrong.

- Yes, tied to the lender's statement every month
- No loans or credit lines
- Payments are split, but the balance hasn't been tied to a lender statement this year
- The whole payment goes to an expense, or the loan balance never changes

### 13. When you buy equipment, vehicles, computers or improvements, how are they recorded?

A capitalization policy and a depreciation schedule keep large purchases from distorting a single month's profit.

- Items over our written capitalization threshold go to fixed assets, with depreciation booked monthly or quarterly
- They're capitalized, but depreciation is only booked when the tax return is done
- Everything is expensed when bought, with no written policy

## Close timing and review

### 14. How soon after month end are the books final and the reports in your hands?

Reports that arrive weeks late describe a month you can no longer act on, and a slow close often means steps are being rushed or skipped.

- Within the first two weeks of the next month
- Sometime during the following month
- Two months or more later, or only when someone asks

### 15. Is there a written month-end close checklist that names each task, who does it and when it's due?

A checklist is how a close stays consistent when the usual person is out, busy or leaves.

- Yes, it's used every month and each step is initialed and dated
- There's one, but it's out of date or not always used
- No, the close lives in one person's head

### 16. After a month is closed, can transactions in it still be added or changed?

Reports already sent to owners, lenders or a tax preparer shouldn't change silently, so a reviewer expects closed months to be locked.

- No. A closing date (lock date) is set, and any change goes through the reviewer
- A closing date is set, but several people can override it and often do
- No closing date is set, and past months have changed after reports went out

### 17. Before monthly reports go to the owner or a lender, does someone other than the preparer review them?

A second reviewer catches what a preparer can't see in their own work, and a dated sign-off shows the month was actually checked.

- Yes. A second person reviews reconciliations, the balance sheet and P&L changes, then signs off with a date
- The owner looks over the P&L, but nobody reviews the balance sheet
- No review. Reports go out as prepared, or there are no monthly reports

## How the score works

Each of the 17 questions has answers worth 0 to 4 points, and the first answer listed is the best one. The questions sit in 6 areas, and each area carries a weight. An area's score is the points earned divided by the points possible. The overall score is the weighted average of the area scores, scaled to 100 and rounded.

| Area | Weight | Questions |
| --- | --- | --- |
| Cash and reconciliations | 3 | 3 |
| Revenue and receivables | 2 | 3 |
| Bills and accruals | 2 | 2 |
| Payroll and sales tax | 2 | 2 |
| Inventory, loans and fixed assets | 2 | 3 |
| Close timing and review | 3 | 4 |

| Score | Result | What it means |
| --- | --- | --- |
| 90 to 100 | Ready for a reliable monthly close | Your close covers what a reviewer looks for: reconciled cash, cleared suspense and clearing accounts, tied-out liabilities and a timely finish. Fix any findings below at your next close. |
| 60 to 89 | Closing, with gaps to fix | The basics are in place, but some balances aren't tied out or some steps get skipped, so parts of each month's reports may be off. The priority fixes show where to start. |
| 0 to 59 | Not ready for a reliable close | Core steps such as reconciliations, suspense clean-up or review aren't happening yet, so the monthly numbers can't be relied on. That's fixable, and it starts with getting the open months right. |

4 questions are marked critical. A 0-point answer, or a skipped answer, on any of them holds the result at "Closing, with gaps to fix", however high the total. The page then shows the score held just under the next band up and says how many critical items hold it.

- How often are your bank and credit card accounts reconciled to their statements in your accounting software?
- At month end, what's left in Uncategorized Income, Uncategorized Expense, Ask My Accountant or other suspense accounts?
- What's left at month end in Undeposited Funds (Payments to deposit in some QuickBooks Online files) or other clearing accounts?
- How soon after month end are the books final and the reports in your hands?

Skipped questions score 0 and produce no findings. The result says how many were skipped.

General information for planning, not accounting, tax or legal advice for your situation. The score reflects only the answers given and is not a review, compilation or audit of your books.

This version of the questions is dated October 8, 2026. Sources were last checked October 7, 2026; the full list is below. Your answers stay in your browser unless you ask for the PDF scorecard. Only the tool, the score, the band and how many questions you answered are counted.

## The checks behind the score

These 4 questions are critical. Each one shows what gets flagged for its lowest answer, why it matters and what to do about it.

### How often are your bank and credit card accounts reconciled to their statements in your accounting software?

**Flagged:** Bank and card accounts aren't reconciled every month. Between reconciliations there's no check that the books caught every deposit and payment, so monthly profit and the cash balance can't be relied on. **What to do:** Reconcile each open month to its statement, oldest first, clear or explain old uncleared items, then make reconciling every bank, card and loan account the first step of each close.

### At month end, what's left in Uncategorized Income, Uncategorized Expense, Ask My Accountant or other suspense accounts?

**Flagged:** Suspense and uncategorized balances roll forward or go unchecked. Money parked in suspense is missing from the P&L, and it could be income, costs, loan payments or owner transfers, each of which changes the numbers differently. **What to do:** Run a transaction detail report for each suspense account, code items from the largest down, and add a close rule: these accounts must be zero before a month is marked closed.

### What's left at month end in Undeposited Funds (Payments to deposit in some QuickBooks Online files) or other clearing accounts?

**Flagged:** A clearing account holds a balance nobody can explain. This often means sales were recorded twice, once from the invoice payment and again from the bank deposit, so income and cash are both overstated. **What to do:** Run the account's transaction report, match each payment to its bank deposit, re-match deposits that were coded straight to income, and bring the balance down to in-transit items.

### How soon after month end are the books final and the reports in your hands?

**Flagged:** Books are closed months late or only on request. Late books can't support decisions, lender reporting or tax estimates, and the longer a month stays open the harder it is to trace what went wrong. **What to do:** Close the open months oldest first, then clear bank feeds weekly so month end is mostly reconciliation and review, with a fixed finish date written on the checklist.

## FAQ

**Q: What does a month-end close involve for a small business?**

A: Reconciling every bank, card and loan account to its statement, clearing suspense and clearing accounts, booking accrual, payroll and depreciation entries, tying receivables, payables, payroll and sales tax balances to their reports, then reviewing the month and locking it with a closing date. The IRS recordkeeping guidance (checked October 7, 2026) lists what good records support, from financial statements to the items on a tax return. The [month-end close checklist](/us/guides/month-end-close-checklist) walks through it day by day.

**Q: How quickly should the books be closed each month?**

A: There's no IRS deadline for it. This check treats books that are final within the first two weeks of the next month as on time, so September 2026 would be closed by mid-October 2026. Clearing bank feeds weekly is what makes that pace realistic, because month end becomes reconciliation and review rather than data entry.

**Q: Can a small business close its books on a cash basis?**

A: Yes, if that matches how the tax return is filed. For C corporations and partnerships with a C corporation partner, the tax cash method depends on the Section 448(c) gross receipts test: for tax years beginning in 2026, average annual gross receipts of $32,000,000 or less over the prior three tax years (IRS Rev. Proc. 2025-32). Cash-basis reports swing with payment timing, so note large items that cross month end.

**Q: What is a closing date or lock date?**

A: A setting that stops transactions from being added or changed in a period after it's been reviewed. QuickBooks Online calls it the closing date (under Close the books in the advanced settings); Xero calls it a lock date (in financial settings). Set it once each month is signed off, for example locking September 2026 after its review, and send any later change through the reviewer.

**Q: What capitalization threshold should a small business use?**

A: A business without an applicable financial statement (generally, audited or SEC-filed statements) can use the IRS de minimis safe harbor to expense amounts up to $2,500 per invoice or item, electing it on each year's return. The policy has to be in place at the beginning of the tax year (writing it down is the simplest way to show that), so a calendar-year business sets its 2027 policy before January 1, 2027. Purchases above it go on a fixed asset and depreciation schedule.

**Q: How is this score worked out?**

A: Each answer earns 0 to 4 points. Areas are weighted, with cash and reconciliations and close timing and review counting most, and the result is scaled to 100. Four questions are critical (bank reconciliations, suspense accounts, clearing accounts and how soon the books are final): a 0 on any of them holds the result at 'Closing, with gaps to fix' however high the total. This version of the questions is dated October 8, 2026.

## Sources

1. [IRS, Recordkeeping for small businesses](https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping) (2026-10-07)
2. [IRS, Tangible property final regulations (de minimis safe harbor, $2,500 per invoice or item without an AFS)](https://www.irs.gov/businesses/small-businesses-self-employed/tangible-property-final-regulations) (2026-10-07)
3. [IRS, Instructions for Form 1099-K (definition of gross amount)](https://www.irs.gov/instructions/i1099k) (2026-10-07)
4. [IRS, 2026 Instructions for Forms W-2 and W-3 (reconciling Forms W-2, W-3 and 941)](https://www.irs.gov/instructions/iw2w3) (2026-10-07)
5. [IRS Rev. Proc. 2025-32 (Section 448(c) gross receipts test, $32,000,000 for 2026)](https://www.irs.gov/pub/irs-drop/rp-25-32.pdf) (2026-10-07)

## Related

- [The Month-End Close Checklist: Day by Day, Close by Business Day 5](https://finbryn.com/us/guides/month-end-close-checklist)
- [Month-end close and reporting](https://finbryn.com/us/services/month-end-close-reporting)
- [Month-end close](https://finbryn.com/us/services/month-end-close-reporting/month-end-close)
- [Pricing](https://finbryn.com/us/pricing)
- [Bookkeeping](https://finbryn.com/us/services/bookkeeping)

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