The month-end banking close checklist

Most close checklists you find online treat the bank as one line: “reconcile the bank”. In practice that single line hides half the work of a month-end, and almost every restated set of accounts we have seen started with a bank balance that was never truly agreed. This is the banking close on its own terms — what to do, in what order, and what each step actually proves.

1. Tie the closing balance first, not last

Before matching a single transaction, write down the closing balance on the bank statement and the balance of the bank account in your ledger. The gap between them is your entire workload for this account. If you match transactions without that number in front of you, you have no way of knowing when you are finished.

2. Import the statement for the whole period

Partial imports are the most common cause of a rec that will not close. Export the full statement period from the bank — first day to last day — and import it whole. A good system will spot and drop the rows you already have rather than double-count them, so overlapping a few days is safer than leaving a gap.

3. Work the unmatched list, not the matched one

• Statement lines with no ledger entry: usually fees, standing orders, interest, or a payment nobody told you about.
• Ledger entries with no statement line: usually a cheque not yet presented, a deposit banked after the cut-off, or a duplicate.
• Amount mismatches: nearly always a bank charge deducted from a receipt, or an FX difference on a foreign payment.

4. Outstanding deposits and unpresented cheques

These are the legitimate reasons your ledger and the statement disagree at a point in time. Money you banked on the 31st that clears on the 2nd is real cash in your books and not yet in the bank's. List them explicitly as reconciling items rather than posting an adjustment — they should clear next month, and if one never does, that is a finding, not a rounding.

5. Cards and merchant settlements

Card takings almost never hit the bank as individual sales. Stripe, SumUp, a card terminal or a delivery platform pay you a net batch: gross sales less their fee, often a day or two later, sometimes with refunds and chargebacks netted off. Treat the processor as its own account. Sales go in at gross, fees come out as an expense, and the bank deposit clears the processor balance. If you post only the net deposit, your revenue is understated by the fee for the rest of the year.

6. Transfers between your own accounts

A transfer from current account to savings is not income and not an expense — it is one movement seen twice. Coded carelessly it inflates both revenue and costs. Match the two sides to each other so the transfer nets to nothing outside the bank accounts.

7. Fees, interest and direct debits you never approved

The bank posts things you did not initiate: account fees, card fees, overdraft interest, insurance renewals on standing order, a subscription that survived the cancellation email. The banking close is the one moment each month when every one of those is in front of you. Read them. This step regularly pays for itself.

8. Foreign currency accounts

If you hold a currency other than your reporting currency, the balance has to be restated at the month-end rate, with the difference taken to an exchange gain or loss. Do it every month rather than once a year; an annual catch-up produces a single unexplainable number that no lender likes.

9. Loans, overdrafts and card balances are liabilities, not bank lines

A loan repayment leaving the bank is part principal and part interest. Only the interest is a cost; the principal reduces the loan. If the loan agreement is on file, the system knows the schedule and can flag the month the split was not made — which is far more reliable than remembering.

10. Prove it, then lock it

The rec is finished when: ledger balance, plus outstanding deposits, less unpresented cheques, equals the statement closing balance. Not “close enough”. When that identity holds for every bank, card and processor account, lock the period so a late upload cannot quietly rewrite the month you just proved.

A clean bank reconciliation is the cheapest credibility a small business can buy. It is the first thing a lender tests and the first thing a fraud fails.

What a lender reads into it

An underwriter comparing your accounts to your bank statements is doing this same reconciliation, quickly and unsympathetically. If the cash in your balance sheet agrees to the statement, everything else in the pack gains credibility. If it does not, nothing else in the pack matters.

How theGL handles the banking close

• Import any bank or card export as CSV or XLSX — the columns are mapped for you and duplicate rows are dropped.
• Every statement line is matched, coded or deliberately set aside, so “unmatched” is always a real to-do list.
• The Close screen carries a live checklist that reads your books: unmatched lines, pending uploads, control flags, ageing, depreciation, loan interest and the trial balance.
• Loan agreements and depreciation policies on file raise a flag in any month their entries are missing.
• Locking the period stops anything new being dated inside it, so a proved month stays proved.

The general version of this — accruals, prepayments, exceptions and issuing the pack — is in our companion article, “A month-end close checklist you can finish”. Read the banking close first; everything else in the month depends on cash being right.