Ask whoever keeps your books one question: on what date each month is everything finished?
A specific answer means a process exists. A vague one usually means the close happens when it happens, and the reports you're reading are older and softer than they look. This article is the full sequence behind a dependable answer, with the failure modes we see inside each stage.
Stage 1: Reconcile every cash and card account
Every bank account, credit card and payment platform in the ledger must equal the real statement balance, to the cent. Clearing accounts count, and should finish at or near zero.
The failure mode here is the "plug" — a balancing entry posted to make the numbers agree without finding out why they didn't. Plugs accumulate in suspense accounts and miscellaneous expenses, and a file with a growing suspense balance is a file where reconciliation has quietly become decoration. If your balance sheet carries an account called "Suspense" with more than a trivial balance, that's your first question for your bookkeeper this week.
Stage 2: Capture everything owed and owing
Every supplier bill for the month entered, paid or not. Every customer invoice raised. The aged receivables report reviewed, and anything drifting past 60 days flagged for action rather than rolled forward silently.
Two common gaps: bills that arrive by email and die in an inbox (fixed with a capture tool like Dext or Hubdoc feeding directly into the ledger), and work delivered but not yet invoiced, which is revenue the P&L can't see. For project businesses, unbilled work-in-progress is often the largest number missing from the books entirely.
Stage 3: Post payroll in full
Wages are the visible half. Superannuation or retirement contributions, tax withheld and leave accruals must land in the correct liability accounts and tie back to what was actually paid.
This stage carries real statutory weight. Australian employers report through Single Touch Payroll every pay day, and from 1 July 2026, Payday Super requires contributions to reach employees' funds within seven business days of payday — the old quarterly cycle is gone. New Zealand's payday filing works on a two-working-day clock. A close that treats payroll as "wages went out, done" is the one that meets penalty notices.
Stage 4: Accruals, prepayments and the adjustments
The annual insurance premium belongs to twelve months, not to the month the invoice arrived. Loan payments split into principal and interest. Depreciation posts. Inventory adjusts to count, where there is inventory.
This is the stage that separates "how the business performed" from "when the mail turned up", and it's the first thing skipped when a close is rushed. The tell is lumpy months: if your P&L spikes every time an annual bill lands, stage 4 isn't happening.
Stage 5: Independent review
A second person reads the draft statements against last month and against the same month last year. Margins that moved, balances that grew, negatives that shouldn't exist, anything in suspense. Comparison catches what staring at one month cannot.
If one person both prepares and approves your close, errors are never independently challenged. This is also the practical argument for a team over a solo bookkeeper: not that solo bookkeepers are less capable, but that no professional reviews their own work reliably.
Stage 6: Lock the period and report
Locking matters more than it sounds. Unlocked prior months drift as people "fix" things retroactively, and then last quarter's numbers no longer match what you sent the bank. Lock the period, then send a report that opens with a summary a non-accountant can read in two minutes: what changed, why, and what needs a decision.
Auditing your current provider in five minutes
- "What date is the close finished each month?" — the answer should be a specific day.
- "What was our suspense account balance last month?" — the answer should be zero, or a short explanation.
- "Who reviews the close besides you?" — the answer should be a name.
- "Are prior months locked?" — the answer should be yes.
- "Show me last month's bank reconciliation report." — it should be produced within a day, and match the bank to the cent.
Five questions, no accounting knowledge required. Providers running a sound process answer all five readily; where the answers are missing, so is the process.