AREA/TASK RESPONSIBILITY DATE DUE COMPLETED REVIEWED GENERAL CLOSE PROCEDURES
CASH
Obtain bank statements for all accounts.
Review all reconciling items: 1. Prepare lead schedule.
To ensure duplicate journal entries are not posted:
1. All journal entries made to the GL module are subject to the signature of the Finance Team Lead.
Periodically validate that the financial system blocks a journal entry if the journal entry does not balance.
Periodically validate that closing journal entries are blocked from being entered into the books for previous periods. Previous periods in the financial system should be locked to prevent changes.
Introductuion: This document should be used as a general guide to creating a monthly financial close process checklist, however, it does not address all activities that
could be assessed during this process. Controllers are encouraged to customize the checklist so that it reflects specific company practices and business operations.
Review outstanding checklist for any long outstanding checks. Determine resolution/disposition.
Perform reconciliation between bank statement and G/L for all cash accounts.
CFO administers closing instructions on a regular basis to appropriate departments or entities.
2. All journal entries made to the GL are assigned a unique Account Reference Number and Batch Number. Note these numbers on the journal entry form.
The Finance Team Lead reviews the Trial Balance Report and ties the totals to the appropriate Balance Sheet or Income Statement Line Item.
GENERAL CLOSE PROCEDURES
INVESTMENTS
ACCOUNTS RECEIVABLE
PREPAID EXPENSES
ROLL-FORWARD OF ACCOUNT:
Reconcile ending A/R balance on sub-ledger to G/L.
1. Prepare lead schedule.
Evaluate all investments for proper accounting with reference to SFAS No. 115, and current accounting rules in regard to accounting for equity investments. Update Controller's investment memo on a quarterly basis. (See also, Equity Investments below.)
Obtain detail of A/R balances by accounting personnel.
ACCOUNT ANALYSIS:
Review all reconciling items:
Prepare account analysis showing bad debt allowance. Prepare roll-forward of Allowance for Bad Debts account.
Obtain supporting documentation for all additions to Prepaid Assets during the period.
Ensure amounts are properly classified as Prepaid Assets. Tie ending balance to G/L.
3. Determine if any cash is considered restricted and/or a
compensating balance for appropriate financial statement
presentation and footnote disclosure.
Tie beginning balance to G/L and to prior-period financial statement.
COLLECTIBILITY REVIEW:
ALLOWANCE FOR BAD DEBTS:
Create an aged A/R detail. Show A/R in following buckets: 0-30 days, 31-60 days, 61-90 days, and 91+ days. Review long outstanding balances.
Perform collectibility review of all A/R balances through discussion with relevant parties. Document results of discussion. Determine if any balances require reserves.
Prepare roll-forward of A/R activity.
Tie Bad Debt Expense to Income Statement.
Tie write-offs to actual write-offs recorded during the period. 2. Prepare list of bank accounts and trading securities for year-end audit confirmation process.
GENERAL CLOSE PROCEDURES
OTHER CURRENT ASSETS
FIXED ASSETS
Prepare account analysis/reconciliation of Prepaid Assets account. Review all reconciling items (if any):
ADDITIONS:
Review new Fixed Asset purchases during period. Obtain related invoices. Ensure invoices have been approved by the responsible budget holder.
Tie additions in roll-forward to detail of purchases during period. Ensure all items added to Fixed Assets are properly capitalized. Tie non-cash acquisitions to Capital Lease or other area(s).
FOOTNOTE DISCLOSURE:
Ensure journal entries were recorded correctly to remove asset and accumulated depreciation.
Determine gain or loss recognized on disposals.
DISPOSALS:
Journal entries related to Fixed Asset disposals are approved by the Finance Team Leader and are supported by appropriate detailed documentation.
Tie disposals in roll-forward to detail of assets disposed of during period.
ACCOUNT ANALYSIS:
Update roll-forward of Fixed Asset by category. Agree to fixed assets sub-ledger .
Prepare footnote disclosure to show asset classes and related balances.
Journal entries related to Fixed Asset additions are approved by the Finance Team Leader and are supported by appropriate detailed documentation.
Review all reconciling items (if any):
Review all asset items for proper classification of short-term vs. long-term.
Prepare account analysis of Other Current Assets account. Prepare roll-forward of Other Current Assets activity.
1. Review all asset items for proper classification of short-term vs. long-term.
GENERAL CLOSE PROCEDURES
ACCUMULATED DEPRECIATION AND AMORTIZATION
OTHER ASSETS
GOODWILL
INTANGIBLE ASSETS
Review all reconciling items (if any):
Perform monthly calculation of depreciation expense. Book related entries.
Ensure that assets under Capital Lease are being amortized appropriately.
ASSETS UNDER CAPITAL LEASE:
Prepare footnote disclosure to show accumulated depreciation balances as of period-end as well as current period depreciation expense.
FOOTNOTE DISCLOSURE:
Prepare roll-forward of accumulated depreciation and amortization accounts.
ACCOUNT ANALYSIS:
Obtain supporting documentation for changes to Goodwill during the period.
Prepare lead schedule.
Prepare roll-forward of Goodwill account activity.
Perform annual (or more frequent, if necessary) assessment for impairment.
Discuss with management as to any changes in Goodwill during period.
Prepare reconciliation of Other Assets account.
1. Review all asset items for proper classification of short-term vs. long-term.
ACCOUNT ANALYSIS: SFAS No. 142 ANALYSIS:
SFAS No. 141 ANALYSIS: ACCOUNT ANALYSIS:
Perform quarterly assessment for impairment.
GENERAL CLOSE PROCEDURES
ACCOUNTS PAYABLE
ACCRUED EXPENSES
CAPITAL LEASE OBLIGATION
CUTOFF:
Perform A/P cutoff—Three days before period-end.
Perform monthly calculation of amortization expense. Book related entries.
Obtain supporting documentation for changes to Intangible Assets during the period.
Prepare lead schedule.
AMORTIZATION:
Contact vendors for outstanding/unbilled amounts as of period-end—External Auditors, Legal, Consultants, Recruiting firms, etc.
Prepare reconciliation of Accrued Expenses accounts. Prepare sub-reconciliations as necessary.
ACCOUNT ANALYSIS:
Obtain copies of all new leases entered into during period. Perform analysis using SFAS No. 13 criteria.
Ensure leases are properly accounted for under SFAS No. 13 - capital vs. operating.
SFAS No. 13 ANALYSIS:
Obtain A/P sub-ledger detail. Reconcile A/P sub-ledger to G/L.
Review all liability items for proper classification of short-term vs. long-term.
Ensure that obligations recorded relate to assets still under ownership.
Prepare and record journal entries to properly reflect cap lease activity.
Update roll-forward schedule of Capital Lease Obligation liability.
ACCOUNT ANALYSIS:
Document all reconciling items.
CUTOFF:
ACCOUNT ANALYSIS:
Contact relevant process owners to request information regarding required period-end accruals.
GENERAL CLOSE PROCEDURES
OTHER CURRENT LIABILITIES
EQUITY
2. Obtain support for all changes in Equity accounts. Prepare roll-forward of Equity accounts:
1. Review all items for proper classification of short-term vs. long-term.
Review all reconciling items (if any):
Prepare roll-forward of Other Current Liabilities activity. Prepare footnote disclosure for future commitments.
FOOTNOTE DISCLOSURE:
Determine proper classification of Capital Lease Obligation as short-term vs. long-short-term.
Prepare lead schedule.
1. Tie Net Income in Retained Earnings roll-forward to Income Statement.
