90-Minute Month-End Close Playbook

If month-end close currently feels like cleaning a blender with the power still on, you are going to love this. I run a bookkeeping-first accounting firm, and we close a lot of months for small businesses. The trick is not heroic all-nighters. It is a tidy, repeatable workflow you can run in 90 minutes. Reconcile accounts, review AR and AP, book payroll and prepaids, tie out your payment processor deposits, and click out financials you can actually use. No spreadsheet acrobatics, no mystery balances, no dread.

Why a 90-Minute Close Works

Speed is not about cutting corners. It is about removing friction. When you time-box each step and follow the same path every month, you eliminate rabbit holes and produce numbers you can trust. At Alviso CPA, month-end close is built into our bookkeeping, accounting, and outsourced controller packages, and we deliver the prior month by the 10th business day. That cadence keeps owners informed without blowing up the schedule.

If you are closing your own books, the 90-minute framework gives you a predictable window to operate in. If you are working with a bookkeeper or accountant, this is the cadence to expect and the checklist to hold everyone accountable to.

What You Need on Your Desk

Set yourself up before the timer starts. Pull these items into one folder so there is zero hunting while the clock is running.

- Bank statements for all accounts that touch cash, including checking, savings, and merchant settlements

- Credit card statements and any loan or line of credit statements

- Payment processor reports for the month from Stripe, Square, PayPal, Shopify Payments, or your merchant account

- Payroll register and payroll journal from your provider, plus a payroll liabilities summary

- AR aging and AP aging reports as of month-end

- Subscription list and prepaid contract list

- Fixed asset additions or disposals, if any

- Prior month financials for comparison and your budget or forecast, if you keep one

Use cloud accounting that supports bank feeds and payroll integration. QuickBooks Online and Xero both work well. For payroll, Gusto, Rippling, and ADP integrate cleanly. Connect your payment processors so gross amounts, fees, and payouts flow in. Automation is how you win back minutes.

Your 90-Minute Schedule

Here is the high-level plan. Treat it like interval training for your books.

Task | Minutes

Preparation | 10

Reconcile Accounts | 25

Review AR and AP | 15

Book Payroll and Prepaids | 10

Produce Financials | 20

Review and Action | 10

Total | 90

Preparation:

Start with a two-minute tech check. Confirm bank feeds are current through the last day of the month. If anything is lagging, pull statements and import them. Lock prior months so past data does not get bumped by a stray edit. If your software supports a closing date, set it through the prior closed month.

Open your AR and AP agings and scan for anything that will trip you up later. Are there negative balances or credits sitting on the wrong customer or vendor? Are there ancient invoices that need to be written off or unapplied payments that need to be matched? Make a quick list of anything you need to fix in the AR and AP block. Do the same for prepaids and fixed assets. If you paid a big annual subscription or purchased equipment, you will book those amortization or depreciation entries later.

Finally, fetch your payment processor monthly summaries. If you run on Stripe or Shopify Payments, grab the monthly gross sales, refunds, chargebacks, fees, and payout reports. For PayPal or Square, do the same. Getting these ready now saves you from guessing later when deposits do not tie neatly.

Reconcile Accounts

This is the heart of a clean close, and the method is simple: match everything that cleared the bank to a proper transaction in your books and keep an eye on the ending balances. Work in this order to prevent tangles.

- Primary checking: Accept all matches you are sure about, then categorize remaining transactions using bank rules. If you see duplicate entries, that is your cue that both a manual entry and a bank feed entry exist. Decide which one to keep, then delete the twin. Verify your statement ending balance matches the reconciliation screen.

- Credit cards: Repeat the process, but watch for two common snags. One is categorizing payments to the card as an expense rather than a transfer or payment to liability. The other is breaking out sales tax or tips on credit card charges. Keep it simple at close, then circle back later if you need granular analysis.

- Loans and lines of credit: Confirm that principal and interest are split correctly. If your loan pulls via ACH, set a recurring journal entry that allocates interest and principal so you do not guess each month.

- Undeposited funds: If your software uses an undeposited funds account, this needs attention. Old undeposited amounts usually mean receipts were recorded but never grouped into a bank deposit. Clear those by matching to actual bank deposits. If you cannot match, this is a candidate for a short cleanup session outside your 90-minute window.

- Payment processor clearing: If you run sales through Stripe, PayPal, or Square, treat those as clearing accounts. Record gross sales to the clearing account, fees as expenses, and payouts as transfers to checking. Then reconcile the clearing account to zero or to a small residual that reflects timing. If the clearing account shows a large balance, your deposits and fees are not being captured consistently.

When the reconciliations are complete, every bank and credit card account should show a reconciliation status through month-end. The ending balances in your software should match the statements. If you see a difference, stop and resolve it. Rolling a discrepancy forward is how tiny problems become year-end migraines.

AR and AP Review

Receivables and payables deserve their own focus block. This is where cash flow starts and stalls.

Start with AR. Open the aging report and sort by amount. For large balances, confirm the invoice exists, was sent, and matches the customer’s purchase order or agreement. Look for partial payments that were not applied to the right invoice. If you have invoices older than 90 days, decide whether to escalate collection or reserve for bad debt. Post a bad debt allowance if accrual accounting is your baseline. If you issue credits or refunds, make sure those are applied to the correct invoices instead of leaving credits floating.

Flip to AP. Scan for duplicate vendor bills, which often happen when a bill imports from your AP tool and then gets entered again by hand. Look for negative balances on vendors, which usually mean a credit was never applied. If you prepay annual insurance, software, or retainers, make sure the original bill is posted to a prepaid asset account rather than expense. Note bills due soon and any that should be accrued at month-end because the service was received but the bill has not arrived. Make a quick note of any vendor you want to pay early to secure a discount next month.

Payroll and Prepaids

Payroll entries should be boring. That is the goal. Use your provider’s payroll journal entry template or integration so gross pay, employer taxes, employee withholdings, and benefits are booked to the right accounts. Confirm that payroll liabilities align with the provider’s liability report. If your books show payroll taxes payable that never clear, you are likely expensing the tax when paid instead of when incurred or you have duplicate entries from both the integration and a manual journal. Pick a single method and stick with it.

For prepaids, amortize monthly. If you paid for an annual subscription, divide by 12 and book that monthly expense. Use recurring journals so this step takes 60 seconds. Keep prepaids tidy and you prevent wild swings in your profit and loss.

Tie Out Payment Processors

Merchant deposits are where many small businesses lose time. Banks receive net deposits. Your books need gross sales, less refunds and fees, to match reality. Here is a clean way to do it that scales.

- Stripe example: Create a Stripe clearing account. Each day, record gross sales to income and credit Stripe clearing. Record fees to expense and credit Stripe clearing for the fee. When Stripe pays out, debit checking and credit Stripe clearing. At month-end, run the Stripe monthly summary and confirm that the clearing account equals any in-transit payouts, reserve holds, or a small rounding difference. If the clearing account is negative or large, you are missing either fees or payouts.

- PayPal and Square work the same way. For Shopify Payments, use the Shopify finance summary to capture gross sales, discounts, refunds, and fees. If you have chargebacks, record them as contra-revenue or an expense, but be consistent. If your processor withholds a reserve, treat it as an asset that will reverse when released.

Avoid posting bank deposits directly to sales unless you also post the offsetting fees. Otherwise your revenue is understated and your processor expense is missing. The clearing account method keeps everything visible and reconcilable.

Produce Financials

With reconciliations done and core entries posted, your financials should not surprise you. Generate your profit and loss, balance sheet, and cash flow for the month and year to date. If you run on accrual accounting, confirm that revenue recognition aligns with delivery of goods and services. If you run on cash basis, ensure that spend and deposit timing did not distort the month in ways you will forget about later. This is where simple categorization pays off.

Scan the profit and loss. Check revenue lines for weird spikes or dips. Look at cost of goods for reasonableness relative to sales. If your gross margin jumps by 15 points, investigate. Review operating expenses and note any new or unusually high spend. Confirm that payroll hits the right department or class if you use class tracking.

Open the balance sheet. Cash should match the reconciled balances. AR and AP should line up with the aging reports you just reviewed. Prepaid and fixed asset accounts should reflect any changes you made. Payroll liabilities should look tidy. If anything is negative that shouldn't be, you have a mistake to correct.

For cash flow, choose the method you understand. Indirect is fine for most small operators. You want to see how operating activities affected cash, not just whether cash went up or down. If you have a budget, run a budget-to-actual view now. If you do not, at least compare to the prior month and the same month last year.

Review and Action

Use your last 10 minutes for a quick analysis that turns numbers into tasks. Circle the big moves, not the noise.

- Compare this month to last month and to your average for the last three months

- List your top three revenue drivers and whether they moved as expected

- Note your gross margin percentage and whether it is within your target range

- Look at AR days and AP days and whether the pattern is getting better or worse

- Check your net operating cash flow and monthly burn or surplus

Turn observations into actions. Email customers with past-due invoices that cross your cutoff. Schedule vendor payments to capture discounts or to smooth cash outflows. Flag any misclassifications you noticed and fix them while the month is still fresh. If you are working with a bookkeeper, send a short note with three bullets: what looked good, what looked off, what you want to change next month.

Fast Fixes for Common Snags

Some problems show up in almost every DIY close. Here is how to handle them without derailing the session.

- Duplicate transactions: If both a bill and a credit card charge exist for the same purchase, keep the bill and mark it paid by the card, or delete the duplicate. Pick a single workflow for vendor spend and stick with it.

- Negative AR or AP: Negative customer or vendor balances usually mean credits or prepayments were not applied. Apply them to the right transaction. If you cannot find the match, create a clearing invoice or bill and resolve it, then add a note to investigate root cause later.

- Giant undeposited funds: This account should reflect only deposits in transit. If it holds months of activity, carve out 15 minutes outside your 90-minute close to batch and clear deposits. Going forward, match customer payments to bank deposits as a rule.

- Payroll liabilities that never clear: Align your bookkeeping method with your payroll provider. Either book detailed journals from the provider and do not rebook when taxes are paid, or book high-level expense plus cash and let the provider’s liabilities report stand as the subledger. Mixing methods creates phantom balances.

- Payment processor mismatches: If deposits do not tie, pull the processor’s monthly summary and reconcile the clearing account to that. Do not guess. If timing differences are the culprit, you will see the variance roll off in the first week of the next month.

Tools That Cut Your Time

The best 90 minutes are the ones you do not spend. A few setup choices shave minutes every month.

- Automated bank feeds: Connect all accounts and set bank rules for recurring vendors with clear, consistent descriptions. Review rules quarterly to keep them accurate.

- Integrated payroll: Use a payroll provider that pushes a clean journal into your books with gross pay, taxes, and benefits split. Avoid manual entry unless your payroll is truly simple.

- AR and AP platforms: Tools like Bill, Melio, or Ramp Bill Pay for AP and your invoicing platform for AR reduce data entry and provide audit trails. Connect them rather than double-entering data.

- Payment processor sync: If your processor offers an official integration that posts gross sales and fees to a clearing account, use it. Configure the mapping carefully once, then monitor.

- Recurring journals: Set recurring entries for prepaids, depreciation, and loan interest allocation. They take seconds to review and post.

- Closing date and user roles: Lock prior periods and restrict who can change closed months. Set granular permissions so you do not get mystery edits.

- Month-end checklist: Keep a simple one-page checklist you tick off each month. We keep ours inside the accounting file so it is always visible.

A Quick Scenario

Say you run a Shopify store using Shopify Payments and PayPal, plus you sell wholesale to a few boutiques that pay on terms. You use QuickBooks Online and Gusto.

Preparation: You grab your bank and credit card statements, Shopify finance summary, PayPal monthly statement, Gusto payroll journal, and your AR and AP agings. You note two old invoices past 60 days and a big annual insurance payment in April.

Reconcile accounts: You reconcile checking and the credit card in 12 minutes because your rules cleaned most transactions. You split out the credit card payment correctly to the liability. You reconcile your PayPal and Shopify clearing accounts. Shopify shows 120,000 in gross sales, 4,800 in fees, and 115,500 in payouts with 300 in transit at month-end. Your clearing account shows a 300 balance, which matches the in-transit number. PayPal shows a similar tiny balance in transit. Good.

AR and AP: You apply a payment that had not been matched to an invoice and send a friendly reminder to a wholesale customer who is 15 days past due. You apply a vendor credit to this month’s bill and move an insurance bill from expense to prepaid insurance.

Payroll and prepaids: You post the Gusto journal and verify payroll liabilities. You amortize 1,000 of your annual insurance prepaid for the month with your recurring entry.

Produce financials: You run the profit and loss and balance sheet. Gross margin is within your target range. Operating expenses are up slightly because you added a new ad campaign. Cash reconciles. AR days ticked up from 28 to 34 because of the slow wholesale accounts, so you add that to your action list.

Review and action: You list three tasks. Follow up on the two overdue invoices. Reduce ad spend by 10 percent if conversion does not improve next week. Add an automated reminder for customers at 15, 30, and 45 days past due. Total time: 88 minutes, including a coffee refill.

Are You Closing on Cash or Accrual?

Pick one and be consistent. Cash basis is fine for many small operators, especially if you do not carry inventory or significant receivables. Accrual provides cleaner month-over-month comparability but requires a bit more discipline with AR, AP, and prepaids. If you are on the fence, run your management reporting on accrual and keep tax reporting on cash if your tax advisor recommends it. Your software can usually produce both views if your bookkeeping is clean.

How to Use Budget and Forecasts

Even a simple budget makes your close 10 times more useful. Set monthly targets for revenue, COGS, payroll, marketing, software, and rent. During the review block, compare actuals to budget and highlight anything outside a reasonable band. If you miss in one area, decide whether it is a timing issue or a real variance that needs a decision. That decision might be shifting spend, raising prices, or changing the sales mix. Without a budget, you are comparing to vibes.

What to Watch in AR and AP Trends

If your AR days stretch and AP days shrink, you are financing customers while paying vendors faster. That squeezes cash. Aim to keep AR days close to your agreed terms and AP days aligned with vendor terms. If you offer early pay discounts to customers, make sure they do not treat the discount as optional. On the AP side, do not be shy about asking for terms from vendors. Your cash flow will thank you.

What Owners Should Read Each Month

You don't need to read every line. Skim the profit and loss and stop at anything that is either very large or very new. Look at gross margin trend. Review payroll as a percentage of revenue. Check marketing spend relative to the revenue it helped create. On the balance sheet, scan cash, AR, AP, and any debt balances. Confirm payroll liabilities are reasonable. On the cash flow statement, look at net cash from operations. If that is consistently negative, you either have a business model issue or you are investing heavily in growth that is not yet paying off.

When to Call in Backup

If you consistently spend more than 90 minutes, your process likely has gaps you can fix. But a few scenarios justify help. Multi-entity consolidation, inventory with costing methods, complex revenue recognition, and heavy fixed asset activity are better handled by a pro. At Alviso CPA, month-end close is standard in our service tiers, and we use cloud tools and integrations to deliver by the 10th business day along with notes on any red flags. If that sounds like the stress-free version of this checklist, it is because we built it to be.

FAQ

What should I do if bank feeds are missing transactions?

Pull the statement and import the missing transactions via CSV, then reconcile to the statement ending balance. Do not wait for the feed to catch up. Mark any oddball items for follow-up.

How do I handle partial customer payments?

Apply the payment to the specific invoice and leave the balance open. Do not book it to revenue again. If you have multiple open invoices for the same customer, apply payments starting with the oldest unless the customer specifies otherwise.

Should I accrue expenses if I am a cash-basis taxpayer?

For management reporting, yes, if it helps you see your true monthly performance. You can still convert to cash basis for tax reporting. The key is consistency inside your books.

My payment processor fees seem high. How do I verify?

Reconcile monthly using the processor’s summary. Calculate fees as a percentage of gross charge volume and compare to your agreement. Watch for cross-border fees, premium card surcharges, and refunds that still carry fees. If the math is off, open a ticket with the processor with your reconciliation attached.

How do I keep my close under 90 minutes every month?

Automate routine entries, maintain clean clearing accounts, set bank rules, and keep a short to-do list during the month for items that need attention at close. Block the same calendar slot each month and protect it like a customer meeting.