A consistent month-end close keeps your books accurate and ready for audit. For nonprofits with grants, the close also supports compliance and funder reporting.

The checklist below covers the tasks most nonprofits complete each month. Add, remove, or reorder tasks to fit your organization.

Sample internal timeline

Customize this timeline. It is not a GAAP or funder deadline.

Days after month-end	Tasks
Days 1 to 3	Bank reconciliation and transaction review
Days 3 to 5	Accruals, allocations, and grant reconciliation
Days 5 to 7	Management reports and variance review
Days 7 to 10	Final review and closing the period

Foundation tasks

Bank reconciliation

Download bank statements for all accounts.
Reconcile each bank account in QuickBooks Online.
Investigate and resolve any differences.
Document any timing differences.
Reconcile petty cash, if you have it.

Credit card reconciliation

Download credit card statements.
Confirm that all charges are recorded.
Confirm that each charge has the correct coding and documentation.
Reconcile to the statement balance.

Transaction review

Review all transactions entered during the month.
Confirm the account coding.
Check for missing or inconsistent QuickBooks Online coding that your accounting design requires, e.g., a missing Class or Customer.
Confirm vendor and customer information.
Follow up on missing documentation.

Accounts payable

Enter all bills received through month-end.
Review the aging report.
Accrue goods and services you received but have not been billed for.
Confirm the grant coding on all bills.

Accounts receivable

Record all receivables through month-end.
Review the aging report.
Follow up on overdue items.
Review collectibility and record any allowance your accountant approves under your GAAP policy.

Grant tasks

Grant expense allocation

Review transactions that are not allocated to a grant.
Allocate expenses to the correct grants.
Check that the allocations are correct.
Document the reason for any allocation that is not obvious.

Grant budget review

Run budget to actual for each active grant.
Investigate variances above your documented review threshold.
Document explanations for variances.
Identify any budget changes you need to request.

Indirect cost calculation

Calculate indirect costs for each grant.
Confirm the authorized rate and the base it uses. Do not assume the base is MTDC or TDC.
Check the amount against any grant cap.
If an entry is needed, record it using the accounts and method your accountant approved.

Grant fund receipts

Record grant payments received.
Match each payment to the grant receivable.
Update the status of each fund receipt.
Reconcile grant cash to the general ledger.

Restricted fund reconciliation

Decide which donor time or purpose restrictions you met during the month. Spending is evidence, but it does not release a restriction automatically.
Prepare reclassification entries that your accountant approves, or apply your documented policy for restrictions met in the same period.
Reconcile restricted fund balances.
Document the status of each restriction.

Accruals and adjustments

Standard accruals

Accrue payroll and benefits if the pay period does not end on the last day of the month.
Accrue unpaid vacation and other paid time off.
Accrue interest on loans and credit lines.
Accrue any other known liabilities.

Prepaid expenses

Amortize prepaid insurance.
Amortize prepaid rent, if any.
Review other prepaid accounts.
Post the amortization entries.

Depreciation

Calculate monthly depreciation.
Post the depreciation entry.
Confirm accumulated depreciation balances.
Update the fixed asset schedule.

Revenue recognition

Decide whether each arrangement is a contribution or an exchange transaction. Calling it a grant does not decide the question.
Recognize a contribution only when it is unconditional. Under FASB ASU 2018-08, a contribution is conditional only when it has both a barrier and a right of return or release.
For an exchange transaction, apply the revenue guidance that fits it. Do not assume that receiving cash or spending money creates revenue.
Record pledge payments received.
Accrue revenue you have earned but not billed.

Reports and review

Management reports

Run the statement of financial position.
Run the statement of activities, by fund if needed.
Prepare or update the analysis of expenses by nature and function. GAAP requires the analysis, but it does not require a separate statement.
Run the cash flow statement, which is optional each month.

Variance analysis

Compare results to the budget and investigate variances above your documented review threshold.
Compare results to the prior month and investigate large changes.
Compare results to the same month of the prior year.
Document explanations for large variances.

Grant reports

Run budget to actual for each grant.
Compare spending pace to the grant period.
Identify grants that are close to their budget limits.
Note upcoming reporting deadlines.

Final close tasks

Trial balance review

Run the trial balance.
Confirm that balance sheet accounts are reasonable.
Confirm that net assets equal the prior month's balance plus this month's activity.
Review any unusual balances.

Interfund accounts

Reconcile interfund due to and due from accounts.
Clear interfund transfers.
Confirm that each fund balances on its own.

Documentation

Save the bank reconciliations.
File the supporting documents.
Document significant judgments and estimates.
Note items to follow up next month.

Closing the period

Confirm that every checklist item is complete.
Get any required approvals.
Close the period in your accounting system to prevent further changes, e.g., by setting a closing date in QuickBooks Online.
Tell stakeholders that the close is complete.

Grant compliance checks

Check these items each month:

Every expense charged to a grant has documentation.
No unallowable costs are charged to federal grants.
Personnel costs are supported by records and controls that fit your organization and your awards.
Purchases followed your procurement policy.
Equipment purchases are recorded in your property records.
Subrecipient monitoring is current, if you have subrecipients.

Upcoming deadlines

Before you close, note what is coming:

Grant reports due in the next 30 days
Grants that are close to their end dates
Audit preparation tasks
Board reporting deadlines

Common problems

Missing grant coding

Expenses without a Class, Customer, or Project can point to a new vendor that needs setup, a training gap, or a process that broke down.

Budget overruns

If you find an overrun early, you have time to request a budget change, correct coding errors, and talk to the funder. Do not move costs to another grant only to fix an overrun.

Timing differences

Watch for expenses recorded in the wrong period, problems with grant start and end dates, and differences between accrual and cash amounts.

Tips for an efficient close

Follow the same process each month.
Document as you go instead of waiting until year-end.
Use a written checklist.
Set deadlines and meet them.
Use tools that reduce manual work.

Using this checklist

Copy this checklist and adapt it to your organization:

Add tasks that are specific to your organization.
Assign each task to a person.
Set your target close timeline.
Track completion each month.
Improve the checklist based on experience.

How GrantLink supports this today

GrantLink keeps grant allocations based on QuickBooks Online transactions, along with budget lines, fund receipts, funding shares, documents, reports, and activity history. QuickBooks Online stays your accounting record, and allocating a transaction in GrantLink does not change QuickBooks Online. GrantLink does not replace funder guidance, your accounting policy, or review by your accountant or auditor.

Sources

FASB ASU 2018-08 covers contributions compared with exchange transactions and the recognition of conditional contributions.
FASB ASU 2016-14 covers nonprofit financial statements, functional expenses, liquidity, and net assets.
2 CFR Part 200, Subpart E contains the federal cost principles. They apply only to federal awards.

See the grant behind the numbers