Month-End Bookkeeping Procedure

Purpose. This procedure sets the sequence and standards for closing each client's books at month end so that reports are accurate, reconciled and delivered by the tenth business day.

1.Timetable

Month-end work starts on the first business day of the following month and must be complete, reviewed and delivered by the tenth business day. The bookkeeper must update the job in the Jobs and Lodgement Tracker at each stage. Clients with payroll or activity statement deadlines in the month take priority.

2.Transaction processing

All bank feed transactions must be coded and matched to source documents. Supplier invoices must be entered to accounts payable with the correct GST treatment and due date. Customer invoices must be issued and receipts allocated. Uncoded or unmatched transactions must not be forced to a suspense account without a note and a query to the client.

3.Reconciliations

The bookkeeper must reconcile every bank, credit card, loan and clearing account to the statement at month end and save the reconciliation report. The accounts receivable and accounts payable subsidiary ledgers must agree with the control accounts. Payroll clearing, superannuation payable and GST control accounts must agree with the payroll and tax reports.

• Bank and credit card accounts
• Loan and hire purchase accounts
• Accounts receivable and payable subsidiary ledgers
• Payroll and superannuation clearing accounts
• GST and withholding control accounts
• Undeposited funds and clearing accounts at nil

4.Review of accounts

The bookkeeper must review the profit and loss and balance sheet against the prior month and the same month last year and investigate variances over ten per cent or 2,000 dollars. Negative balances, duplicated transactions and unusual coding must be corrected. Prepayments, accruals and depreciation must be posted where the engagement includes them.

5.Query list and reporting

Outstanding queries must be listed with the transaction, the question and the amount and sent to the client with the month-end report pack. The report pack must include the profit and loss, balance sheet, aged receivables, aged payables and the reconciliation summary.

6.Second-person review

A senior bookkeeper must review the reconciliation reports and the report pack before it is sent and record the review in the Jobs and Lodgement Tracker. Unresolved variances over 30 days must be escalated to the Bookkeeping Manager.