Bookkeeping Basics · Edmonton
The month end close checklist for small business.
Closing the month means your numbers stop moving and start meaning something. Here's the full checklist, a worked example of month-end entries and the QuickBooks steps.
By the Plum team- Updated Oct 2026
- 9 min read
- Get every transaction in: sales, bills, payroll, receipts.
- Reconcile every bank, credit card, loan and payment processor account.
- Review receivables and payables for anything stale or wrong.
- Post adjusting entries: prepaids, accruals, depreciation, deferred revenue.
- Review the reports, then lock the month in QuickBooks.
A month end close checklist for small business turns "I think the books are mostly up to date" into "October is done, and these numbers are right". Closing means finishing the month's bookkeeping, checking it, and then locking it so nothing changes by accident later.
Big companies have close teams and calendars. You don't need that. You need the same steps in the same order every month, and the discipline to do them before the month gets old. This guide gives you the checklist, explains why each step is there, and works through the adjusting entries with real numbers.
1Why closing the month matters
Bookkeeping that's never closed is never finished. Transactions keep getting edited, last quarter's profit drifts by a few hundred dollars, and your GST return no longer matches your books. A monthly close gives you three things:
- Reliable numbers to decide with. You can see October's profit in early November, not next spring.
- Clean GST returns. If each month is reconciled and locked, the quarter or year adds up without surprises. Your return is GST collected minus input tax credits, and both come straight from closed months.
- A painless year end. Your accountant gets twelve closed months instead of a year of loose ends, which usually means a lower year-end bill.
2The month end close checklist, step by step
1. Capture everything
Make sure every sale, invoice, bill, expense and payroll run for the month is in the books. Chase missing receipts now, while you still remember what that $86 charge was.
2. Reconcile every balance sheet account that has a statement
Bank accounts, credit cards, loans, lines of credit, and payment processors like Square, Stripe or PayPal. Each should match its statement to the cent. Our bank reconciliation guide shows how.
3. Review accounts receivable
Run the aged receivables report. Are there invoices that were actually paid but never matched? Customers 60 days late who need a call? Anything that will never be collected?
4. Review accounts payable
Run the aged payables report. Look for bills you paid but didn't mark paid (they'll show as owing twice), and bills that should be in this month but aren't.
5. Post adjusting entries
This is where cash-based records become accurate monthly profit. See the worked example below, and our full guide to adjusting journal entries.
6. Check the clearing accounts
Undeposited funds, payroll clearing, suspense or "ask my accountant" accounts should be at or near zero. A growing balance in any of them is a sign something isn't being finished.
7. Review GST
Compare the GST payable account to the GST you collected and claimed this month. Check that sales were coded with GST where they should be, and that exempt or zero-rated items weren't.
8. Review the reports
Read the profit and loss and balance sheet side by side with last month. A jump in an expense line or a negative balance in an asset account usually points to a miscoded transaction.
9. Lock the month
Set a closing date so the month can't be edited without a deliberate override.
A sample close calendar
Spreading the work over the first ten days keeps it from becoming a weekend project. Here's a rhythm that works for most small businesses:
| Days after month end | What gets done |
|---|---|
| Days 1 to 3 | Statements download, last receipts and bills come in, sales are finalised |
| Days 3 to 5 | Bank, card, loan and processor reconciliations |
| Days 5 to 7 | Receivables and payables review, adjusting entries, clearing accounts |
| Days 7 to 10 | GST check, report review, questions answered, month locked |
If you file GST monthly, your return is due one month after the period ends, so a ten-day close leaves plenty of room. Quarterly and annual filers get the same benefit: every month that's already closed is a month you don't have to revisit when the return is due. Our GST filing deadlines guide lists the dates.
3Worked example: month-end adjusting entries
Say you run a small Edmonton marketing agency as a corporation. It's October 31. Your bank and cards are reconciled, and you have three adjustments to make:
- In January you paid $2,400 for a year of business insurance and recorded it as a prepaid expense. One month's share is $2,400 ÷ 12 = $200.
- Your part-time employee worked the last week of October, but that pay run happens on November 7. Their gross wages for those October days are $1,200.
- Your computers and furniture cost $9,000 and you depreciate them in your books over five years: $9,000 ÷ 60 months = $150 a month.
| Account | Debit | Credit |
|---|---|---|
| Insurance expense | $200.00 | |
| Prepaid insurance | $200.00 | |
| Wages expense | $1,200.00 | |
| Accrued wages payable | $1,200.00 | |
| Depreciation expense | $150.00 | |
| Accumulated depreciation | $150.00 | |
| Totals | $1,550.00 | $1,550.00 |
Without these entries, October's profit would be $1,550 too high. That's the difference between "we made $6,000 this month" and "we made $4,450", which matters when you're deciding whether to hire or how much to pay yourself.
When the November 7 payroll runs, the $1,200 accrual is cleared against wages so October's work isn't expensed twice. Many people post a reversing entry on November 1 to handle this automatically. A real accrual for an employee would also include your employer share of CPP and EI; we've kept it to wages to keep the example clear.
4The month end close in QuickBooks Online
- Reconcile each account from the gear icon, then Reconcile under Tools.
- Post adjustments with + New, then Journal entry. Use a clear memo like "Oct prepaid insurance" so anyone reading the ledger knows why it exists. For entries that repeat every month (like the insurance and depreciation above), you can save a recurring journal entry template.
- Review reports: Profit and Loss and Balance Sheet (try the comparison to the previous month), plus Accounts receivable aging and Accounts payable aging.
- Lock the month: go to Settings, Account and settings, Advanced, then turn on Close the books in the Accounting section. Set the closing date to the last day of the month and add a password.
5Common month end close mistakes
- Closing before reconciling. Reports look finished, but a missing transaction or duplicate means they're wrong.
- Leaving clearing accounts to pile up. A $4,000 undeposited funds balance usually means deposits were recorded twice.
- Accruing without reversing. If you accrue a bill or wages and then also record the actual bill or payroll, the expense hits twice.
- Editing closed months. Unlocking October to "fix one thing" in March can change a GST return you've already filed.
- Skipping the review. The reconciliation catches missing money; the review catches money in the wrong category.
What to do with the numbers once they're closed
A close is only worth the effort if someone reads the result. Spend fifteen minutes with three questions. Did revenue and gross margin move the way you expected? Is any expense line creeping up month after month? And how much cash do you need to set aside for GST and income tax based on this month's profit? Closed months answer those questions honestly, and they also make conversations with your bank or accountant much quicker, because the numbers stop changing between meetings.
Your monthly close, as a checklist
Twelve clean closes make the year-end checklist short. The close is exactly what's included in Plum's monthly plans for businesses in Edmonton, St. Albert, Spruce Grove and Fort Saskatchewan. If you'd like your months closed without doing it yourself, book a quick call or see our flat monthly pricing.
6Questions people ask
What is a month end close?
It's the set of steps you take after each month ends to make sure every transaction is recorded, every account is reconciled and any adjustments are posted. Once it's done, you lock the month so the numbers can't change by accident.
How long should a month end close take for a small business?
With good habits and a few dozen transactions a week, a few hours of work spread over the first week or two of the next month is typical. The bigger and messier the books, the longer it takes.
Do small businesses really need to close every month?
You don't have to, but monthly closes make year end, GST returns and tax planning much easier. Closing only once a year means a year of errors to find all at once.
How do I close a month in QuickBooks Online?
Finish your reconciliations and adjustments, then set a closing date under Settings, Account and settings, Advanced, Accounting. Add a password so changes to closed months need a deliberate override.
What adjusting entries are made at month end?
Common ones are using up prepaid expenses like insurance, accruing wages or bills for work done but not yet invoiced, recording depreciation, and deferring customer deposits for work not yet done.
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Book a free 15-min callThis article is general information for Alberta businesses and isn't tax or legal advice. Rules and thresholds change, so confirm your situation with your accountant or CRA.