If you run a business with a small team, you probably know closing the books each month isn’t exactly fun. It can feel tedious and sometimes chaotic, especially if you’re wearing a few hats. But a steady monthly close keeps things from sliding off track. It’s the link between knowing where your money went and having a real plan for what’s next.
Small teams don’t always have the luxury of a big accounting department. The process—gathering receipts, checking revenue, wrangling reports—still has to happen. The difference is there’s less wiggle room for errors or missed details. Most teams want a checklist that doesn’t require ten different spreadsheets or scare away non-accountants.
Here are the steps small teams use to keep monthly close realistic, thorough, and not completely miserable.
Set Goals and Make Things Clear
The first thing that helps? Get everyone clear on what the monthly close is supposed to accomplish. For many small teams, this means more than getting the numbers right on paper. It’s about learning whether those numbers match up with what actually happened.
Define what you want each month. Is the goal to spot spending leaks? Or to prep for a tax payment you don’t want to scramble over? Laying this out up front focuses everyone, even if there are only a few people involved.
From there, match up roles. Maybe you have one person who’s on top of incoming payments, another who keeps an eye on expenses, and someone else double-checks reports. Write these roles somewhere everyone can see. It saves a ton of messaging later.
Prep the Paper Trail
When it’s time to actually start the close, you want all the paperwork in one place—or as close to it as possible. This can feel boring, but skipping it will mess up everything else.
Gather invoices from the last month, old receipts (even the crumpled ones), bank statements, credit card summaries, and any PayPal or Venmo activity that runs through the business. Don’t just dig these up—double-check dates and make sure nothing is missing. If there’s a bunch of scanned files, name them so it’s obvious what they are.
Some teams use Google Drive. Others keep a simple folder on a desktop. The key is consistency.
Review the Numbers: Revenue and Expenses
Now that you have the paperwork, start with the basics: did the money you think came in, actually show up? Open your income records—often invoices or sales logs. Match them to your bank statement. If Sally’s payment was expected on the 4th, did it hit your account?
Then look at every expense. Even that $3 coffee or random Dropbox renewal should have an entry. Group similar costs together—office supplies in one list, utilities in another. This isn’t just for neatness. It makes it way easier to spot if you’re spending too much in one area.
You might find a surprise subscription or see that you paid for something twice. Either way, you’ll catch it now rather than months from now.
Reconcile Accounts: Matching Balances
Reconciling is just a fancy word for making sure your books agree with your real-world banking numbers. Start with the bank statement for the past month. List out your business checking and any savings or credit cards.
Go line by line. Does each reported deposit or payment match what’s in your accounting record? If not, flag it. Sometimes it’s a timing thing—maybe an ACH payment hit the day after the month ended. Other times, it’s missing entirely.
If you find an error, don’t panic. Figure out if it’s a data entry issue, a late deposit, or something more serious. Mark it down so you can follow up. Small teams often skip this step because it’s slow, but it matters most for spotting mistakes early.
Inventory Checks: Don’t Skip This If You Sell Stuff
If you sell physical products—or even keep office supplies—do a quick inventory check at the end of the month. It doesn’t have to be overly formal. Count what’s on the shelf and compare it to what you think should be there.
Did anything disappear? Maybe someone needed extra shipping supplies, or a product was damaged. Adjust your records to fit the reality you see.
Some teams run into shrinkage (things go missing) or surplus (items magically appear). Tracking these month-to-month helps you decide if your ordering is on point or if you’re buying too much.
Look at Cash Flow: In and Out
Even if you already know what your total sales or expenses were, breaking it down as a cash flow helps. Cash flow is really just looking at what actually moved in and out of your bank account.
List the cash that came in from sales, loans, investments, or anything else. Do the same for what left—payroll, bills, inventory, subscriptions.
See if your cash is rising or dropping. Maybe the P&L looks fine, but the cash flow is negative because you collected late payments or spent more than you received.
A good cash flow review lets you see if you’ll have enough to cover bills next month or if you need to move money around.
Debts and Liabilities: Take Stock
Nobody enjoys looking at debt, but it’s better than ignoring it. Pull up a list of business loans, credit cards, or money owed to vendors.
Check if any payments are late or coming up. Make a quick payment schedule—something as simple as “$300 due on the 10th, $500 due on the 25th.” Set a reminder if you need one.
This step stops surprise fees and keeps your credit history healthy. In small teams, even tiny late payments can sting.
Financial Analysis: Check How You Did
Once the dust settles, it’s time to ask some questions. Did your revenue meet expectations? Did you spend more or less than you planned? This is where you look for patterns over time, not just for the last month.
Compare your results to previous months. If sales jumped 10%, try to remember what changed. If expenses spiked, can you trace it to a specific project? Small teams often skip benchmarks, but even a simple chart tracking three months of results is useful.
Use this to decide what to tweak for next month. Maybe you want to cut software costs or double down on a marketing test that worked.
Put Reports Together
With all the numbers checked, it’s time to pull together your actual reports. This usually includes a profit and loss statement, a balance sheet, and a cash flow summary. If you use accounting software, these might be ready already. If not, spreadsheets work fine.
Keep things simple. Most stakeholders or team members just want the key stats: how much came in, how much went out, and what’s left.
Write a short summary—maybe a paragraph explaining big moves or surprises. Share this with anyone who needs it, whether it’s co-founders, investors, or just your business partner.
Team Review: Make Space for Feedback
At this point, loop in everyone who played a part—or anyone who has skin in the game. Set up a quick meeting or video call. Open up the reports and walk through them. Don’t just read numbers; ask what worked and what was a hassle.
Encourage the team to spot gaps or mention small frustrations. Maybe the receipts took too long to find, or reconciling didn’t feel as smooth as expected. Write these down as possible improvements for next month.
This “post-mortem” doesn’t have to be long. Just making space for the conversation helps avoid bottlenecks and builds trust.
Also, if you’re looking for examples or case studies on how other small businesses handle processes like these each month, you might check out the conversations going on over at News2Junction. There, business owners and team leads share what’s working and where they get stuck.
Keep the Process Flexible and Up-to-Date
Now that you’ve been through a full cycle, don’t see the checklist as set in stone. Businesses shift, software changes, and your team might find new tricks that help.
Maybe you try automating invoice collection or update your spreadsheet template. Or you add a quick inventory check with your morning coffee. These adjustments can turn a chore into a habit.
Some teams find that switching up the order of their close works better. Or maybe you decide to delegate a task or rotate responsibilities, so no one feels stuck always doing the same thing.
The trick is to keep talking about what’s working and what’s not—there’s rarely a perfect system, especially when the team is small.
How Does a Monthly Close Checklist Really Help?
People often think of the monthly close as something only accountants should care about. But in small teams, it’s usually about survival. Without knowing where the money’s really going, making smart decisions is nearly impossible.
A good close process avoids headaches down the line—whether you’re facing taxes, a new investor, or just planning next quarter. It doesn’t have to be stressful or overcomplicated.
Try to keep it short and honest, and make it something your team can actually follow every month. As small businesses grow, this process often becomes second nature. But the basics—clear roles, clean documents, regular check-ins—don’t really change.
At the end of the day, it’s another rhythm to your month. It helps keep the surprises to a minimum and leaves more energy for the parts of your business you actually enjoy.
Over time, you’ll tweak the steps or add shortcuts that fit how your team works. Maybe the checklist loses a few items or gains some extras as you find out what really matters for your business. And that’s fine. Month by month, it’s all about keeping the lights on and having the info you need, when you need it.