In what order should a multi-entity month-end close run?

Each company closes first, then trial balances come in, new accounts are mapped and rates are set. Intercompany is agreed and eliminated, adjustments are posted, the statements are reviewed and tied to the worksheet, budget variances are explained, the board pack is built and the month is locked last.

Why must the companies close before the group?

Because the group figures are only as final as the trial balances under them. A company that books an entry after the group has started changes its own numbers, the intercompany differences and everything that depends on them, and the work has to be redone.

What happens if a company is late?

The group close waits for that company or goes ahead with its trial balance marked as not final. Either way, say so and keep a list. A close screen that shows which companies are still open makes the delay visible to everyone, not only to the group accountant.

Multi-Entity Month-End Close Checklist

Closing one company is a routine. Closing five companies and then the group is a sequence, and each step needs the one before it to be final. This checklist puts the steps in order, says what each one checks, and shows why the order matters. Work down it every month and tick off each line before starting the next.

The checklist

Each company closes its own month. Bank and ledger reconciliations are done, accruals and depreciation are posted and the company's own reviewer has signed off. Check: every company has said it is final, not just that it has stopped posting.
Trial balances come in. Take a trial balance from each company for the same period end, in the company's own currency. Check: debits equal credits, and the account list is the one you expected. Companies on Zoho Books are read directly. Companies on Xero, QuickBooks or any other system upload a trial balance each month.
New accounts are mapped. Any account added since last month needs a place on the group chart. Check: nothing is unmapped. A new account that is not mapped should stop the month, because otherwise it drops out of the totals unseen.
Rates are set. Enter the closing rate and the average rate for every currency other than the group's, and the historical rates for any new equity. Check: each rate is quoted the right way round and sits close to last month's.
Intercompany is agreed and eliminated. Compare what each company holds against each other company, pair by pair. Chase the differences, then eliminate. Check: what is left uneliminated is on a list, with an owner.
Adjustments are posted. Group adjustments and any opening adjustments are entered as journals with a reason, apart from the companies' books. Check: every adjustment has a reason, and none is left half-entered.
Statements are reviewed and tied to the worksheet. Read the balance sheet, profit and loss and cash flow for the group. Check: each statement balances, and the group column of the consolidation worksheet equals the published figures.
Budget variance is explained. Compare actual with budget or latest estimate for the month and the year so far, for each company and the group. Check: each large variance has a one-line reason before the pack is written.
The board pack is built. Prepare the pack with the commentary. Check: the pack's figures are the ones on the reviewed statements.
The month is locked. Lock the period so entries cannot be added or changed. Check: every earlier item is complete, and a record shows when the month was locked.

Why the order matters

Mapping comes before totals. An unmapped account is a missing amount, and it can only be found before the statements are read.
Rates come before translation, and translation before intercompany. Two companies in different currencies can only be compared once both are in the group's currency.
Intercompany comes before review. Reviewing statements that still contain intercompany balances wastes the review.
Budget comes after review. Comparing a budget with figures that are still moving gives variances that disappear by the next day.
The board pack comes after the variances. Its commentary is built from them.
Locking is last. After the lock, the number the board read is the number in the system.

Who does what

Each company's accountant closes the company and supplies its trial balance. A group accountant maps, sets rates, prepares the eliminations and posts the adjustments. The CFO reviews the statements and the pack.

Give every line an owner and a cut-off

A checklist without names and times is a wish. For each of the ten lines, write down who does it and when it must be finished, then count the days backwards from the date the board needs the pack. A company that is late is not a surprise on the last day, because its cut-off passed days earlier and the close screen showed it.

When a new company joins the group

The first close after an acquisition or a new incorporation needs more than the ten lines. Map all of the company's accounts to the group chart. Set its ownership percentage and the date the group gained control. Agree with the other companies which accounts will hold intercompany items. Bring in its opening balances. Only then does it join the monthly sequence.

What makes a close slip

A company reopens its month after the group has started.
A new account appears on the last day, unmapped.
An intercompany difference is discovered in the review, not before it.
Adjustments are entered without a reason, and later questioned.
Nobody knows which companies are still open, so the group accountant asks one by one.

The fix for most of these is the same: put the checklist where everyone can see which lines are done. A close screen that shows what is stopping the month does this without a chasing email.

After the lock

If an error is found in a locked month, do not edit the locked figures quietly. Either reopen the month, which in Finconsol needs a reason that is recorded, or correct it in the next month with an adjustment and a note that names the month it belongs to. The steps behind this checklist are described in how to consolidate financial statements, and a free workbook for a small group is in the consolidation Excel template.

Multi-entity month-end close checklist