Month-end close: a checklist

The month-end close goes most smoothly when it follows the same order every time. Business Central does not force you through a close, so the structure has to come from you. Here is a checklist built on Microsoft's own overview of closing tasks, with the pages and functions you will need. Use it as a starting point and adapt it to your setup and your auditor's requirements. The checklist does not cover local deadlines.

Business Central does not require period closing

According to Microsoft Learn, accounting periods are only needed if you want to close the income statement or run date compression. They do not control which dates you can post on. The fields Allow Posting From and Allow Posting To do that, on the General Ledger Setup page and on User Setup. The latter applies to the individual user and overrides the general setup.

This means that closing a month is a procedure you introduce yourselves. Typically you restrict the posting dates while the reconciliations are under way, and close fully once the figures are approved.

Use both options deliberately. Microsoft describes that you can control allowed dates for the whole company, for the individual user and for journal templates, and that the dates can be entered as date formulas, so they follow the work date instead of having to be changed by hand each month. Check Learn for what applies in your version.

Before you reconcile: get everything posted

Start by getting all documents in. Microsoft lists these items in its overview of period closing:

Post sales and purchase orders, invoices, credit memos and return orders.
Post cash receipts and payment journals.
Update and post recurring journals, including those for fixed assets.
Post depreciation on fixed assets and any adjustments.
Process intercompany transactions if you use intercompany.

Reconcile the subledgers

Once the documents are posted, reconcile customers and vendors to the general ledger. Microsoft points to the Aged Accounts Payable report for vendors and a corresponding reconciliation of receivables. Reconcile bank accounts too, so that the balance in Business Central agrees with the bank statement. We describe this in more detail in the article on bank reconciliation.

If you trade in foreign currency, the exchange rates must be updated and the posted customer, vendor and bank entries adjusted. This is done with the Adjust Exchange Rates batch job.

Note in the checklist who reconciles what and which report is the documentation. Then a colleague can take over if you are ill, and the auditor can see how the figures were checked.

Deferrals and VAT

Entries that belong to another period can be posted with deferral templates, so the amount is spread automatically. Remember that there are special fields, Allow Deferral Posting From and To, if you have closed the ordinary posting dates.

VAT also has to be made ready. The Calc. and Post VAT Settlement batch job closes open VAT entries and transfers the amounts to the VAT settlement account. You can print a test report first. When and how VAT is reported depends on your local rules, so confirm the procedure and deadlines with your auditor or tax authority.

Check and close

Run the financial reports and check the balances on general ledger accounts, customers, vendors and bank. Microsoft mentions the pre-close reports as part of the process. When the figures agree, you can set Allow Posting To up to and including the closed period, so nobody posts backwards by mistake.

If you use inventory periods, Learn recommends closing them monthly. This is then shown in the checklist for accounting periods.

Save the reports from the close as PDF or in your document archive, so the figures from that day can be found again, even if postings are later made back into the period.

Make the checklist your own

Write down your order of work, give every item an owner and a date, and keep it somewhere the whole team can see. The first time it takes effort. The second time you will find out which steps always cause trouble and can fix the setup.