Burlingham Financial ServicesA month-end close checklist for small businesses
Ten steps to close your books properly every month, in the right order.
Falling behind on bookkeeping is one of the most common problems in small business, and one of the most fixable. Whether it's three months or three years, the route back is the same: gather, reconcile, review, then put a routine in place so it doesn't happen again.
Why it's worth fixing now
- Deadlines don't move. Your accountant needs complete records to prepare accounts and returns, and late filing brings penalties.
- HMRC expects records to be kept. Companies must keep accounting records for six years from the end of the financial year, and sole traders for five years after the 31 January filing deadline. Inadequate records can lead to a penalty of up to £3,000.
- Digital records are now the norm. VAT-registered businesses must already keep digital records, and Making Tax Digital for Income Tax started on 6 April 2026 for sole traders and landlords with qualifying income over £50,000, followed by £30,000 from April 2027 and £20,000 from April 2028.
- You're flying blind. Without up-to-date books you can't see cash flow, profit margins or who owes you money.
Step 1: Gather what you have
You don't need everything in a neat folder before you start. The essentials are:
- Bank, credit card and loan statements for the whole period
- Sales invoices and records of income
- Supplier bills and receipts
- Payroll reports, if you employ anyone
- Your last set of accounts, or the last trial balance your accountant has
Most banks let you download statements going back several years. Receipt apps such as Dext, Hubdoc and Apron can extract the details from photos and emailed bills, which saves hours.
Step 2: Agree a starting point
Every catch-up starts from a balance you know is right. That's usually the closing trial balance from your last approved accounts. If the books have never been right, we start from the bank, because a bank statement is an independent record that can't be wrong.
Step 3: Reconcile the bank, month by month
Bank feeds or statement imports bring in every transaction, then each one is matched, coded and checked. Working in date order means each month's closing balance proves the next month's opening balance. This is the heavy lifting, and it's where most catch-ups succeed or stall.
Step 4: Rebuild the ledgers
Once the bank is right, sales and purchase ledgers are brought into line: invoices matched to payments, missing bills chased, duplicates removed and credit notes allocated. Control accounts for VAT, PAYE and pensions are then checked against the amounts actually reported and paid.
Step 5: Review and hand over
A final review looks at the trial balance as a whole: are the balances sensible, does the director's loan account make sense, are there items that need your accountant's judgement? You then get a handover note listing what was fixed and anything outstanding.
If returns are already late, speak to your accountant early. They can advise on the tax position while the records are being brought up to date, so nothing waits on anything else.
Keeping it from happening again
- Connect bank feeds so transactions arrive automatically
- Snap receipts on the day, using a capture app
- Set up bank rules for regular payments
- Book a monthly close, either yourself or with a bookkeeper
How I can help
I offer a free review of your records followed by a fixed quote, so you know the cost before any work starts. Most catch-ups are finished within two to four weeks, depending on how far behind things are and how quickly paperwork arrives.
Sources
This article is general information, correct at the date it was last reviewed. It isn't tax or legal advice, so please speak to your accountant about your own circumstances.