Closing the month does not need to be a big job. Done regularly, it takes about an hour and means your numbers are always ready when you need them: for a loan application, a conversation with your accountant, or simply knowing how the business is doing.
Work through the list in order. Each step makes the next one easier.
1. Record every sale
- Check that every job delivered this month has been invoiced.
- Turn any accepted quotes into invoices.
- Check that recurring invoices went out as expected.
2. Record every bill and expense
- Enter supplier bills received this month, including ones you haven't paid yet.
- Collect receipts for card and cash spending. Lost receipts are the most common month-end gap.
- Check that regular costs (rent, subscriptions, utilities) have all been recorded.
- Approve or reject team members' expense claims, so they are paid and counted in the right month.
3. Record every payment in and out
- Mark invoices as paid, or part-paid, when the money arrived.
- Mark bills as paid when you paid them.
4. Reconcile your bank account
This is the step that catches mistakes. Compare your bank statement for the month against what you have recorded:
- Every payment on the statement should match something in your books, and the other way round.
- Investigate anything that doesn't match: a missing bill, a duplicate entry, a bank charge nobody recorded.
- When you're done, the closing balance in your books should equal the closing balance on the statement.
5. Review who owes you
- List every unpaid invoice and how late it is.
- Send reminders for anything overdue. Our payment reminder templates can help.
- Note any customer who is regularly late, and consider asking for deposits or shorter terms in future.
6. Review what you owe
- List unpaid supplier bills and when each is due.
- Plan which to pay and when, based on your cash.
7. Look at the numbers
Spend ten minutes on your reports:
- Profit and loss: did you make a profit this month? Are any costs higher than you expected?
- Cash flow: did cash go up or down, and why? If profit and cash went in different directions, profit vs cash explains the usual reasons.
- Compare with last month and the same month last year, if you have it.
8. Update your forecast
Replace last month's estimates with what actually happened, and look ahead. See how to make a simple cash flow forecast.
9. Lock the month
Once everything is recorded and reconciled, close the month so nothing can be changed in it by accident. If a correction is genuinely needed later, it can be made deliberately.
10. Back up and file
- Keep a copy of the month's bank statements and reports.
- Store receipts and bills where you can find them again.
- Send your accountant anything they need, while the month is still fresh in your mind.
How Purpl helps
- Invoices, bills and payments in one place, including recurring invoices and bills, so most of steps 1 to 3 happen as you work.
- Scan bills and receipts with your phone's camera, or upload them on the web, and Purpl reads the details for you.
- Expense claims from your team, with approval.
- Bank reconciliation: import your bank statement as a CSV or Excel file and match each line to your invoices, bills and payments.
- Overdue invoices flagged automatically, with one-tap reminders by email, WhatsApp or phone from your Weekly Business Update.
- Profit and Loss, Balance Sheet and Cash Flow statement whenever you need them, and a monthly CFO Deck with a health score and insights on the month you choose.
- Close accounting periods to lock a finished month against new postings.
