Guide
A month-end close checklist for professional services firms
What closing the month covers for a firm that bills by time or by project, the order to do it in, and which steps can run every day so month end becomes a review.
Key takeaways
- Closing the month means the books match the bank, every bill and every hour is in, and the numbers are ready for a decision.
- Professional firms carry three things other businesses don't: unbilled time, retainers and money held for clients.
- Work through the close in a fixed order, from the bank outwards, so each step builds on a checked one.
- Most of the matching can run every day. What's left at month end is judgement: write-offs, accruals and anything unusual.
What closing the month means
A month-end close is the point where you agree that the month's numbers are right. The bank and the books match, every supplier bill is recorded, every hour worked is either billed or counted as work in progress, and the reports you send to partners or owners can be trusted.
In a law firm, an accounting practice, a consultancy or an agency, the close is harder than it looks. Revenue isn't a pile of sales. It's time and project milestones, some billed, some not, some paid in advance. Getting the month right means knowing which is which.
The checklist, in order
Work from the bank outwards. Each step relies on the one before it being checked, so the order matters more than the speed.
- Bank and cards: match every line on every account to a record in the books
- Supplier bills: record every bill received in the month, with the right account and project
- Client payments: mark each invoice paid, part paid or still open
- Unbilled time: total the hours worked but not yet invoiced, by client and matter
- Retainers and money held for clients: check each balance against the work drawn down
- Payroll: check the month's pay against hours, leave and any changes
- Accruals: record costs that belong to this month but haven't been billed yet
- Review: compare the month with the last one and the budget, and explain what moved
Where professional firms go wrong
The same three problems come up in most firms that bill for their time.
- Time recorded late, so the month's work in progress is understated and next month's is inflated
- Retainers drawn down without a record, so the balance a client thinks they have isn't the one in the books
- Expenses rebilled to a client twice, or not at all, because nobody checked them against the invoice
What can run every day
Most of the checklist doesn't need to wait for the last week of the month. Matching bank lines, recording bills and marking invoices paid are the same work whether you do them daily or monthly. Done daily, each one takes minutes, and the details are still fresh.
Unbilled time works the same way. A daily look at hours recorded against each matter shows gaps while people still remember what they worked on, not four weeks later.
Where a person still decides
Some parts of the close are judgement, and should stay that way: writing off time that won't be billed, deciding an accrual, treating a payment that doesn't fit any invoice. The aim of a good close isn't to remove those decisions. It's to make sure they're the only thing left at month end, each with the evidence in front of the person making it.
How The Accountant helps
At OFFHOURS we're client zero: The Accountant keeps our own books. Every day it records new supplier bills, reconciles the bank statement to the cent and updates which invoices are paid, so month end starts with the matching done.
It works inside your accounting software and bank feed, and it brings back what it can't settle with the evidence attached. Every action is logged and can be undone. It prepares payments; your own people approve and send them.
