Month-end close
Closing a month moves your books from "data still arriving" to "this period is settled." This page is the checklist. The locking itself happens in Company → Fiscal Years, covered with the year-end steps on Fiscal Years & Close Year.
Pick a cadence you'll keep. Monthly within 5–10 business days of month-end is typical; quarterly is the minimum if you don't want a painful year-end. A consistent 10-day close beats an occasional 3-day one.
1. Make the data complete
- Reconcile every bank and credit card account to the statement that ends on or after the last day of the month, finishing with a $0.00 difference (or a documented adjustment). See Banking → Reconciliation.
- Review receivables with Reports → A/R Aging. Chase overdue invoices, fix payments applied to the wrong invoice, apply or refund customer credits, and consider an allowance for doubtful accounts on balances 60+ days overdue.
- Review payables with Reports → A/P Aging. Pay or document overdue bills and apply vendor credits. If you received goods or services but no bill yet, accrue the expense and reverse it next month.
- Post depreciation for your fixed assets and confirm loan payments split principal and interest as the lender reports.
- Check recurring transactions in Transactions → Recurring Transactions so nothing due this month is missing.
- Reconcile sales tax: the Sales Tax liability for the month should match the Sales Tax Payable balance. A gap usually means a sale without a tax code.
- Confirm payroll entries for the month are posted and the payroll liability accounts show what is owed.
- Count inventory if you carry stock — at least at year-end — and post differences as an Inventory Adjustment. See Inventory.
2. Post adjusting entries
| Adjustment | Why |
|---|---|
| Accrued expenses / accrued revenue | Received or delivered this month, billed later |
| Prepaid expenses / deferred revenue | Paid or received now for a later period |
| Inventory adjustment | Physical count differences |
| Bad debt write-off | A customer balance you've decided is uncollectible |
| Reclassifications | Moving an entry from the wrong account to the right one |
Post them as journal entries (Transactions → Journal Entry).
3. Review the numbers
- Run Reports → Trial Balance for the last day of the month. Debits always equal credits in Solid Accounting; what you're looking for is balances that don't make sense. Compare with last month — a 3× jump in Office Supplies is either real or a posting error.
- Check Reports → Ledger Health for findings worth fixing before you lock.
- If you keep a budget, compare budget to actual in Reports → Budgets. Variances over about 10% are the ones to explain. See Budgets.
4. Lock the period
Open Company → Fiscal Years, expand the year, and lock the month (or close all periods through it). Locking needs the Accountant or Admin role. If Ledger Health has serious findings, the app asks you to confirm first. Once a period is locked, nothing dated inside it can be posted until the period is reopened. The lock and any reopen are recorded in the Audit Trail.
Found a mistake after locking? Reopen the period in Fiscal Years (reopening a period also reopens every later period), post the correction, and lock again. Step-by-step instructions, and the year-end close, are on Fiscal Years & Close Year.
At year-end, also
- Review the 1099 Report (Vendors → 1099 Report): every 1099 vendor has a TIN on file and card payments are excluded. The threshold is $600 for 2025 payments and $2,000 from 2026. File by January 31 for 1099-NEC.
- Hand your accountant what they need — an Accountant's Copy, the Year-End Package, or the Tax Trial Balance and its export for tax software.
- Set up next year's budget.
- Close the year in Company → Fiscal Years — see Fiscal Years & Close Year.