Nonprofit Month-End Close Checklist

A solid month-end close process keeps your finances accurate and audit-ready. For nonprofits managing grants, it's also essential for compliance and funder reporting.

This checklist covers everything you need to close the books each month.

Timeline Overview

Days After Month-End	Tasks
Day 1-3	Bank reconciliation, transaction review
Day 3-5	Accruals, allocations, grant reconciliation
Day 5-7	Management reports, variance review
Day 7-10	Final review, close the period

Week 1: Foundation Tasks

Bank Reconciliation

• Download bank statements for all accounts
• Reconcile each bank account in QuickBooks
• Investigate and resolve any discrepancies
• Document any timing differences
• Reconcile petty cash (if applicable)

Credit Card Reconciliation

• Download credit card statements
• Verify all charges are recorded
• Ensure proper coding and documentation
• Reconcile to statement balance

Transaction Review

• Review all transactions entered during the month
• Verify proper account coding
• Check for missing Classes (grant tags)
• Verify vendor and customer information
• Follow up on any missing documentation

Accounts Payable

• Enter all invoices received through month-end
• Review aging report
• Verify accruals for received-not-invoiced items
• Ensure proper grant coding on all payables

Accounts Receivable

• Record all receivables through month-end
• Review aging report
• Follow up on overdue items
• Record any bad debt adjustments

Week 2: Grant-Specific Tasks

Grant Expense Allocation

• Review unallocated transactions
• Allocate expenses to appropriate grants
• Verify allocation accuracy
• Document allocation rationale for non-obvious items

Grant Budget Review

• Run budget vs. actual for each active grant
• Investigate significant variances (>10%)
• Document explanations for variances
• Identify any needed budget modifications

Indirect Cost Calculation

• Calculate indirect costs for each grant
• Verify base calculations (MTDC/TDC)
• Check against grant caps
• Post indirect cost journal entries

Grant Fund Receipts

• Record any grant payments received
• Match to grant receivables
• Update fund receipt status
• Reconcile grant cash to GL

Restricted Fund Reconciliation

• Calculate restricted spending for the month
• Prepare net assets release journal entries
• Reconcile restricted fund balances
• Document restriction status by fund

Accruals and Adjustments

Standard Accruals

• Accrue payroll and benefits (if pay period doesn't align)
• Accrue unpaid vacation/PTO
• Accrue interest expense (loans, credit lines)
• Accrue any other known liabilities

Prepaid Expenses

• Amortize prepaid insurance
• Amortize prepaid rent (if applicable)
• Review other prepaid accounts
• Post amortization entries

Depreciation

• Calculate monthly depreciation
• Post depreciation journal entry
• Verify accumulated depreciation balances
• Update fixed asset schedule

Revenue Recognition

• Recognize deferred revenue as earned
• Record any conditional grant revenue (conditions met)
• Review pledge receivable payments
• Accrue any earned but unbilled revenue

Reports and Review

Management Reports

• Generate Statement of Financial Position
• Generate Statement of Activities (by fund if needed)
• Generate Statement of Functional Expenses
• Generate Cash Flow Statement (optional monthly)

Variance Analysis

• Compare to budget—investigate variances over 10%
• Compare to prior month—investigate significant changes
• Compare to prior year same month
• Document explanations for significant variances

Grant Reports

• Generate budget vs. actual for each grant
• Review spending pace against grant timeline
• Identify grants approaching budget limits
• Note any upcoming reporting deadlines

Final Close Tasks

Trial Balance Review

• Run trial balance
• Verify balance sheet accounts are reasonable
• Confirm net assets reconcile to prior month + activity
• Review for any unusual balances

Intercompany/Interfund

• Reconcile interfund due to/due from accounts
• Clear any interfund transfers
• Ensure funds balance individually

Documentation

• Save bank reconciliations
• File supporting documentation
• Document any significant judgments or estimates
• Note any items for next month's attention

Lock the Period

• Review closing checklist completion
• Obtain any required approvals
• Close the period in accounting system (prevent further changes)
• Communicate close completion to stakeholders

Grant Compliance Checkpoints

Monthly grant compliance checks:

• All expenses charged to grants have documentation
• No unallowable costs charged to federal grants
• Personnel costs supported by timesheets
• Procurement policies followed for purchases
• Equipment purchases properly tracked
• Subrecipient monitoring current (if applicable)

Upcoming Deadlines Review

Before closing, note what's coming:

• List grant reports due in next 30 days
• Identify any grant end dates approaching
• Note audit preparation needs
• Flag any board reporting deadlines

Common Issues to Watch For

Missing Grant Codes

Expenses without Class/Project assignments can indicate:

• New vendor needing setup
• Staff training gap
• Process breakdown

Budget Overruns

Catching overruns early allows time to:

• Request budget modifications
• Shift spending to other budget lines
• Plan for funder conversation

Timing Differences

Watch for:

• Expenses recorded in wrong period
• Grant start/end date issues
• Accrual vs. cash differences

Tips for Efficient Closes

1. Close consistently — Same process each month builds efficiency
2. Document as you go — Don't wait until year-end
3. Use checklists — Don't rely on memory
4. Set deadlines — Hold yourself to the timeline
5. Automate where possible — Use tools that reduce manual work

Using This Checklist

Download and customize this checklist for your organization:

1. Add organization-specific tasks
2. Assign responsibilities to team members
3. Set your target close timeline
4. Track completion monthly
5. Refine based on experience

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GrantLink automates many grant-specific close tasks—expense allocation, budget tracking, indirect cost calculations, and reporting. See how it can simplify your close.