The honest benchmark
Among businesses doing between two and fifty million in revenue, a well-run month-end close completes in five business days. Many take fifteen to thirty. A meaningful number never formally close at all, and simply look at the bank balance.
The difference is rarely headcount. It is almost always that closing has been treated as a single large task rather than a sequence of smaller ones, most of which can happen before the month even ends.
Why slow closes cost real money
A close that lands on the 25th gives you numbers that are nearly a month old on arrival. Decisions made from them are decisions made about a business that no longer exists. Slow closes also push problems downstream: an unreconciled account in March is found in April and investigated in May, by which point nobody remembers the transaction.
And the compounding effect matters. A business that closes slowly rarely produces monthly management accounts, which means variance against budget is never reviewed, which means the budget stops being used, which means the next year's plan is built on instinct.
What a five-day close looks like
Before month end
Most of the work does not need the month to be over. Bank and credit card feeds should be reconciled weekly, not monthly. Recurring journals for depreciation, prepayments and accruals should be scheduled, not rebuilt. Vendor bills should be entered as they arrive.
Days one and two
Close the subledgers. Finalise accounts payable and receivable, process the final payroll accrual, reconcile every bank and card account, and complete inventory adjustments if applicable.
Day three
Journals and review. Post accruals and deferrals, reconcile balance sheet accounts, and run a flux analysis comparing each line to the prior month and to budget. Anything moving more than a set threshold gets an explanation before anyone signs off.
Days four and five
Reporting and sign-off. Produce the financial statements, write a short commentary on what moved and why, and distribute. The commentary matters more than most people expect: numbers without narrative tend not to get read.
The usual bottlenecks
- Waiting on documents. Chasing receipts and vendor bills in the first week of the month is the most common delay, and the most fixable, through policy and automation.
- Unreconciled accounts carried forward. An account that has not balanced for three months takes far longer to fix than one caught immediately.
- Manual spreadsheets between systems. Every manual transfer is a delay and a place for errors to enter.
- No checklist. Closes that rely on one person remembering the sequence stop entirely when that person is away.
- Reviewing during close rather than after. Questions raised mid-close halt it. Capture them, finish, then investigate.
Tightening it without adding people
Pick one bottleneck a month. Move bank reconciliation to weekly. Write the checklist down. Automate the three journals you rebuild every month by hand. Set a document cut-off and hold to it. Most businesses find they can halve their close time in a quarter without hiring anyone, simply by moving work earlier and writing the process down.
TallyWise provides this as part of how we run month-end close. Book a call to talk through your situation.
