Accounts Payable Month-End Close Checklist
A practical accounts payable month-end close checklist: cut-off, GRNI, unmatched invoices, accruals, vendor statements and the AP-to-ledger reconciliation.
Most of a slow month-end close is not accounting. It is chasing: the receipt nobody entered, the invoice sitting in someone's inbox, the approval that stalled. The checklist below is ordered so that the chasing happens before the last day of the month, and the close itself is mostly review.
Before period end
1. Set and announce the receipt cut-off
Everything physically received by the last day of the month must be receipted in the system by a stated time, usually the first working day after. Goods received in the period but entered in the next one are the most common reason a period's costs are wrong, and the hardest to find later.
2. Clear the approval queue
Invoices waiting for approval cannot be posted, and purchase orders waiting for approval cannot be receipted against. Send reminders to approvers with items older than a few days, and escalate the rest. An approval workflow with timed escalation does this without anyone remembering to.
3. Chase known missing invoices
Run the GRNI report a week before period end, not after it. Receipts older than 30 days without an invoice are worth an email to the supplier now, while there is still time for the invoice to arrive and be matched.
At period end
4. Post every invoice received in the period
Invoices dated in the period and received by the cut-off should be entered, matched and posted. Invoices that fail matching still need a decision: resolve the exception, or leave the invoice unposted and make sure its cost is covered by an accrual.
5. Review unmatched and on-hold invoices
Every invoice held on a matching exception is a cost that may not be in the ledger. List them with the reason (price, quantity, missing receipt), the age and an owner. A three-way match with sensible tolerances keeps this list short enough to read.
6. Review the GRNI balance
Age the GRNI accrual by receipt date. The under-30-days bucket is normal timing. Older lines need investigation: price differences that were never routed to a price variance account, returns without a reversal, duplicate receipts.
7. Accrue for costs with no purchase order
Services, utilities and anything bought without a purchase order will not appear in GRNI. Accrue them from contracts, timesheets and last month's run rate, and set each accrual to reverse on the first day of the next period. See accrued expenses vs accounts payable for the entries.
8. Review prepayments
Amortise prepaid costs (insurance, software subscriptions, rent in advance) for the month, and check any supplier deposits against the orders they relate to.
9. Revalue foreign-currency payables
Open payables and accruals in foreign currencies are revalued at the period-end rate, with the difference booked as an unrealised exchange gain or loss.
Reconcile and review
10. Reconcile the AP subledger to the general ledger
The total of open supplier balances must equal the accounts payable control account. A difference almost always means a manual journal posted straight to the control account, which should not be possible and should be investigated rather than plugged.
11. Reconcile statements for your largest suppliers
Supplier statements surface invoices you never received and credit notes you never applied, faster than any internal report. The largest ten or twenty suppliers by spend cover most of the risk.
12. Check for duplicate payments and duplicate invoices
Look for the same supplier, amount and date, or the same invoice number with different formatting. Recovering a duplicate payment after it has been made is slow; catching it in the payment run is free.
13. Review open purchase orders
Open purchase orders are commitments, not liabilities, so they do not go on the balance sheet. They do belong in the budget report, and orders that will never be fulfilled should be closed so that committed spend is not overstated.
14. Review variances and analytics
Purchase price variance by supplier, budget versus actual by department or project, and days payable outstanding. The purpose is not a report for its own sake but a list of questions for next month.
A typical timetable
| Day | Work |
|---|
| Day -5 | GRNI report and supplier chasing; approval reminders |
| Day -1 | Cut-off announced; final approvals |
| Day +1 | Receipt cut-off; post remaining invoices |
| Day +2 | Unmatched invoices, GRNI ageing, non-PO accruals, prepayments, FX |
| Day +3 | AP-to-GL reconciliation, supplier statements, duplicate check |
| Day +4 | Variance and budget review; close AP for the period |
Common questions
How long should the AP part of the close take?
For a small or mid-sized business with purchase orders and receipting in one system, three to four working days is realistic. Teams that close faster usually do steps 1 to 3 continuously during the month rather than at the end.
Should we hold the ledger open for late invoices?
Not for long. Accrue for the invoices you know are coming and close on time. An accrual estimated on day +2 is more useful than an exact figure on day +15.
What is the most common month-end AP error?
Receipt cut-off. Goods delivered in one period and entered in the next move costs between months and leave GRNI wrong in both.
The short version
Do the chasing before period end: cut-off, approvals and missing invoices. At period end, post what you have, review exceptions and GRNI, accrue what has no purchase order, and revalue foreign balances. Then reconcile AP to the ledger and to your largest suppliers' statements. Most of the time saved comes from the first three steps, not the last ones.