There are several things you can do to improve the efficiency of closing the books. Here are the top two:

Correct Errors Early: Transactional errors can arise throughout the month, which means that you can run the financial statements a few days prior to month-end and spot most of them. This is a vast improvement over waiting until you are in the midst of the closing process and then finding problems. By spotting errors a few days early, the accounting staff can research and correct items at their leisure, rather than doing so in a hurry at month-end. Also, a rushed error correction at month-end may not yield a proper fix, which means that someone has to research and correct the issue a second time – which may delay closing the books.

If you use early error correction, there will still be a few days near the end of the month where errors may arise, since the accounting staff will not have reviewed financial statements that include those days. Still, there should be far fewer errors to deal with.

Reconcile Accounts Early: One of the lengthier tasks at month-end is to reconcile all of the accounts in the balance sheet that have significant ending balances, to ensure that their contents are correct. The accounting staff could start these reconciliations a few days before month-end, and then update them for any transactions that occurred during the last couple of days of the month. This is not a cure-all by any means, since many accruals are generated at month-end, and so will not appear in early versions of account reconciliations. Nonetheless, it can remove a fair amount of reconciliation labor from the core closing period.

The concept of reconciling early is especially important for the bank reconciliation. The cash account may have many adjustments each month that are caused by unrecorded bank fees, transactional errors, not-sufficient-funds check rejections, and so forth. You can reconcile the bank accounts a few days early based on the on-line account information that most banks make available to their customers over the Internet. This leaves just a day or two of final reconciliation work during the core closing period.

Additional tip: Many banks automatically generate PDF versions of monthly bank statements and post them to their web sites, where you can download them. These statements should be available within 24 hours of the end of each month; you can complete the monthly bank reconciliation with this report.

These tips courtesy of CPE Link self-study course author, Steven Bragg. Happy closing!