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Conducting a Month-End Review

Closing your books at the end of each month is a critical practice to ensure your financial data is accurate and ready for tax reporting or business analysis. This tutorial walks you through a standard month-end review process in Kezi.

Prerequisites

Before starting your review, ensure that:

  • All Invoices and Vendor Bills for the month have been recorded and validated.
  • All Payments have been recorded.
  • Bank Reconciliation is completed for all bank accounts.

Step 1: Check the Trial Balance

The Trial Balance is your first stop to ensure the technical integrity of your books.

  1. Navigate to Accounting > Reports > Trial Balance.
  2. Set the As of Date to the last day of the month (e.g., 2024-01-31).
  3. Click Generate Report.
  4. The Check: Scroll to the bottom. Total Debit must equal Total Credit.
  5. Scan for Oddities: Look for accounts with balances that seem impossible (e.g., negative "Office Supplies" or a credit balance in "Cash").

Step 2: Analyze the Profit and Loss

Now that you know the accounts are balanced, see how the business performed during the month.

  1. Navigate to Accounting > Reports > Profit and Loss.
  2. Set the Start Date and End Date for the month.
  3. Click Generate Report.
  4. The Review:
    • Revenue: Does it match your sales expectations?
    • Gross Profit: Is your margin healthy?
    • Expenses: Are there any unexpected spikes? Use the General Ledger to drill down into any suspicious expense accounts.

Step 3: Review the Balance Sheet

Verify your financial position at the end of the month.

  1. Navigate to Accounting > Reports > Balance Sheet.
  2. Set the As of Date to the last day of the month.
  3. Click Generate Report.
  4. The Review:
    • Cash Balance: Compare this to your actual bank statements.
    • Accounts Receivable: Look at the Aged Receivables report to see who still owes you money.
    • Accounts Payable: Look at the Aged Payables report to see what bills are coming due.

Step 4: Lock the Period

Once you are satisfied that the numbers are correct, you should "lock" the month to prevent accidental changes.

  1. Navigate to Accounting > Configuration > Lock Dates. (Note: This may require administrator permissions).
  2. Set the Journal Entries Lock Date to the last day of the month you just reviewed.
  3. Save the settings.

[!SUCCESS] Congratulations! Your month is officially closed. By following this process every month, you ensure that your end-of-year tax preparation will be stress-free.