The self-funded monthly close

This is the reconciliation part of a monthly close, not the whole close. It assumes one or more payment platforms, one bank account, and a ledger. It does not assume a finance team. Each step is a question with a yes or no answer, and the month is not closed until every answer is yes or the exception is written down.

Before you start

1. Pull the itemized payout report from each platform for the period, not the summary. It should list every charge, fee, refund, dispute, and adjustment with the payout it belonged to.
2. Pull the bank statement for the period, plus the first few days of the next period, for payouts in transit.
3. Export the ledger for the period: every entry touching revenue, fees, refunds, and the clearing account the sync uses.
4. If you have subscriptions, export the invoice list for the period with status, and the customer list with access state.

Tie one: platform to bank

1. Does every payout the platform says it sent appear as a deposit in the bank, at the same amount?
2. Is every payout that has not landed on a list of items in transit, with its expected date?
3. Is there any deposit from the platform that the platform’s report does not explain?
4. Did any payout fail, and if so, was it retried and did the retry land?

Tie two: platform to books

1. Does gross revenue in the ledger equal gross charges on the platform report?
2. Are fees in the ledger, as an expense, equal to fees on the report?
3. Are refunds and disputes in the ledger, as contra-revenue, equal to the report?
4. Are adjustments, reserves, and dispute fees booked, each to a named account, or is there an unexplained line in the clearing account?
5. Does the clearing account the sync uses return to zero, or to a balance you can explain with the in-transit list?

Tie three: books to bank

1. Does the ledger’s cash balance agree with the bank statement, after the in-transit list?
2. Is every reconciling item dated and explained, and is any of them older than one period?

The operating checks

1. How many invoices failed this period, for how much, and how many were recovered by retry or a card update? If you cannot answer, the number is not small.
2. Does every customer with access have a current paid subscription, and does every paid subscription have access? List the exceptions on both sides.
3. If you sell annual plans and keep the books on an accrual basis, is deferred revenue for the period’s annual sales recorded and the released portion recognized?

Sign

1. Who reviewed the exceptions, and who is signing the month? If those are the same person, fine. Write the name down.
2. Keep with the signed month: the platform report, the bank statement, the ledger export, the in-transit list, and the exception list with explanations. That is the file someone opens when you raise money, sell, or get audited.