General information, not tax advice. Rules change and every situation is different; talk to a licensed professional before acting. (Sample post.)
A month is closed when every account matches its statement and nothing is left uncategorised. That sounds obvious, but most small-business books are “mostly right”, and mostly right is where surprises live.
The short version
Every bank, card and loan balance in your software matches the statement for the last day of the month. If it does, you can trust the report.
What “matches” means
The closing balance in the software equals the closing balance on the statement, to the cent, with no unexplained adjustments.
A note on timing
Card statements often close mid-month. Reconcile to the statement date, not the calendar month.
Where this lives in your software
Most tools call it Reconcile, usually under the banking or accounting menu.
Glossary
Reconcile: to check that two records of the same money agree.
Our close checklist
1. Reconcile each account. 2. Clear the uncategorised queue. 3. Match receipts over your threshold. 4. Review payables and receivables. 5. Lock the period.
If a number surprises you, it’s usually a category, not a crisis.
Why it matters
You can trust the report you read on the 10th, and tax season becomes a summary of twelve closed months instead of a rebuild.
Written by Avery Lane (sample person), founder.
Written by Avery Lane (sample person), founder.