Month-end close for a US subsidiary: from data sync to the close package

1. Define the period and the expected package

Start with the legal entity, cutoff date, reporting currency and framework. A US subsidiary may keep its books in one framework and send a reporting package under another. The parent’s request should identify the mapping, adjustments and explanations it expects rather than assume that translated account names make the two frameworks equivalent.

Agree who prepares, reviews and releases the package. The close date and the date on which information was extracted are separate facts. Keep both visible so a reader knows whether later invoices or entries were considered. A timetable is an internal agreement to adapt to the engagement, not a promised number of days for every close.

2. Collect reports on a consistent basis

Use the right company, period, accounting basis and currency before comparing reports. Intuit’s accounts receivable aging help distinguishes aging as of today from aging at the report date. That setting can explain why an aging does not agree with a balance sheet stopped at month-end.

Retain extraction dates and report settings with the workpaper. If a report was refreshed after an entry, identify which version is final. Otherwise, the balance sheet can include an adjustment that the receivable aging or general ledger used for support does not yet contain.

Scroll the table if needed.

3. Check that accounts have a review destination

Map accounts into review cycles using their substance and the engagement’s account structure. The coverage review asks whether a balance has a place in the working file, including new or unusual accounts. It is different from checking that debit and credit totals agree.

A lead schedule links accounts and balances to their support. A tie-out compares amounts with identified sources. A balancing line added to make an unexplained difference disappear does not create support. Keep its nature and the outstanding evidence visible until the reviewer has enough information to conclude.

4. Support balances, cycle by cycle

Scroll the table if needed.

Intercompany balances: reconcile the difference before classifying it

A confirmation from the parent should identify entity, date, currency and whether its balance is a receivable or payable. Reverse the perspective when comparing it with the subsidiary. Then separate timing items, different posting dates, exchange rates and genuine unrecorded transactions rather than placing all differences in a generic exchange column.

Fictitious example: the parent confirms €450,000. At a fictional rate of 1.08 dollars per euro, that is $486,000. The subsidiary shows $484,900. The $1,100 difference is explained by a $540 timing item and a $560 conversion item, leaving no unexplained remainder. The explanation still needs the underlying evidence; arithmetic alone is not a confirmation.

For an advance that may be of a long-term-investment nature, ASC 830-20-35-3 raises a separate qualification question. The FASB source describes particular treatment when settlement is not planned or anticipated and the entities are consolidated, combined or accounted for under the equity method. Do not transfer that conclusion mechanically to the subsidiary’s standalone accounts.

5. Prepare cut-off and adjusting entries

Deferred revenue, accrued income, prepaid expenses and accrued expenses concern different relationships between service and invoice dates. The cut-off guide explains their French terminology and worked examples. The preparer documents the contract, the calculation convention and the amount already posted before proposing a new adjustment.

Keep the proposed entry, approval and actual posting distinct. Once the firm posts an adjustment in the accounting system, refresh the relevant reports and support. A cut-off schedule showing an amount to post should not be treated as an unexplained difference in a bank reconciliation.

6. Obtain a review that can be followed later

The reviewer needs the balance, support, explanations and proposed adjustments, not just a completed status. A rejection should identify what must be resolved. The firm’s approval policy establishes who is competent and authorized to review the work.

A second qualified reviewer provides a separate perspective when one is available. In a one-person arrangement, an approval record is not evidence of two independent people. In Close Review, once the firm has two reviewers, the preparer does not approve their own cycle. Preparation assistance changes how a file reaches review; it does not remove the professional’s final decision.

7. Check consistency and late changes

Fictitious example: a supplier cycle was reviewed using $84,250. A $1,200 invoice dated before cutoff is entered later, bringing the ledger to $85,450. The review needs to consider that changed balance and the new evidence. The old approval should not be used as if it covered the updated amount.

• Balance sheet, P&L, ledger and agings use compatible dates and accounting bases.
• New accounts and material balances have a documented review destination.
• Prior-year comparatives and unexpected zero balances have an explanation.
• Adjustments are reflected in the final accounting reports.
• Intercompany differences are broken down rather than buried in a plug.
• Open requests and late changes have an owner and a visible conclusion.

8. Deliver the workpaper and the group reporting bridge

The package normally combines a summary, financial reports, adjustment list and support by cycle. The group may also require mappings, currency translation information and local-to-group adjustments. Keep those reporting instructions beside the package rather than assume every group requests the same workbook.

Close Review organizes QuickBooks Online accounts into review cycles, with dedicated work on bank reconciliation, agings, revenue cut-off, rollforwards, intercompany balances and analytical review. It provides an Excel file with summary, balance sheet, P&L, adjusting entries, cycle tabs and attachments. The month-end checklist is a preparation aid for the team and the final reviewer.

Common questions