Financial Close and Consolidation: Overview
The financial close process ensures accurate, timely financial statements. In NetSuite, this involves closing accounting periods, reconciling accounts, consolidating multi-subsidiary data, eliminating intercompany balances, and producing consolidated reports. This playbook walks through each step, from period lock to final consolidated financials.
Organizations with multiple subsidiaries (OneWorld) must consolidate data correctly. Intercompany transactions create reciprocal balances that must be eliminated. NetSuite provides native consolidation, elimination rules, and consolidated reporting. We cover setup, execution, and best practices.
Period Close: Locking the Books
Accounting periods control when transactions can be posted. Under Setup > Accounting > Accounting Periods, periods can be Open, Locked, or Closed. Locked periods prevent new transactions; closed periods are fully closed. Configure period types (fiscal year, adjusting periods) to match your calendar.
Close process: 1) Ensure all transactions for the period are entered. 2) Run reconciliations (bank, AR, AP, inventory). 3) Post adjusting entries. 4) Lock the period. 5) Close (if your process uses hard close). Use a checklist or custom record to track close tasks. Assign owners and due dates.
Reconciliation Before Close
Reconcile key accounts: bank accounts (use Bank Reconciliation), AR (aging reconcile to control account), AP (aging reconcile), inventory (physical count vs. perpetual). Investigate and resolve discrepancies before locking. Document adjustments with clear memos.
Use saved searches to find unreconciled items, stale transactions, or outliers. Run standard reports (Trial Balance, Balance Sheet) and compare to prior period and expectations. Address material variances. For subsidiaries, ensure each sub closes correctly before consolidation.
Multi-Subsidiary Consolidation
OneWorld allows multiple subsidiaries. Consolidation combines subsidiary financials into a parent view. Setup: define subsidiary hierarchy, consolidation reporting structure. NetSuite supports reporting-only subsidiaries (no transactions) and standard subsidiaries. Choose consolidation method: balance sheet only, or P&L and balance sheet.
Run Consolidate Subsidiaries from the parent subsidiary. NetSuite rolls up data by account, eliminating intercompany per your rules. The consolidation can be one-pass (all subs) or hierarchical (sub to parent, then parent to grandparent). Results are stored in consolidated accounts; run reports from the parent.
Elimination Rules
Intercompany balances must be eliminated for consolidated reporting. Configure elimination rules under Setup > Accounting > Eliminations. Define which accounts to eliminate (e.g., intercompany receivable/payable), the elimination subsidiary, and mapping. NetSuite generates elimination entries during consolidation.
For revenue/expense elimination (e.g., intercompany sales), configure income statement elimination rules. Work with your accountant to define the correct elimination logic. Document rules for audit. Run elimination report to verify eliminations before finalizing.
Intercompany Reconciliation
Before consolidation, ensure intercompany balances match. Subsidiary A's "Due from B" should equal Subsidiary B's "Due to A." Run an intercompany reconciliation report or saved search. Investigate and correct mismatches (timing, posting errors). Resolve before running consolidation.
Consolidated Reporting
From the parent subsidiary, run Trial Balance, Balance Sheet, P&L. Reports show consolidated data with intercompany eliminated. Use report segments (subsidiary, department) for drill-down. Export to Excel for further analysis. Schedule consolidated reports for board or management.
Close Checklist and Task Management
A structured close checklist ensures nothing is missed. Create a custom record type for close tasks: task name, owner, due date, status (Not Started, In Progress, Complete), period. Add tasks for: bank rec, AR aging review, AP aging review, inventory reconciliation, journal entry review, period lock, consolidation run, elimination verification. Use workflow to send reminders. Dashboards for close status.
Assign owners per subsidiary and per task. Dependencies: some tasks must complete before others (e.g., reconciliations before lock). Use custom fields for blockers and notes. Executive dashboard: percent complete, tasks overdue. Run close on a schedule (e.g., 5 business days after period end). Document checklist in SOP. Review and update checklist quarterly.
Automation: scheduled scripts can run recs and flag exceptions. Workflow creates tasks when period opens. Saved search for incomplete tasks. Email digest to close manager. Integrate with project management if your org uses it. Balance structure with flexibility—not every period is identical (year-end has extra steps).
Soft Close vs Hard Close
Soft close: period remains open for adjustments; new transactions post to the period if dated within it. Common for fast close with follow-up adjustments. Hard close: period is locked; no new transactions. Prefer for audit and formal reporting. Configure under Accounting Periods. Some orgs soft close initially, hard close after board approval.
Adjusting periods: NetSuite allows post-close adjusting entries in designated periods. Useful for audit adjustments, prior period corrections. Configure adjusting period following each quarter or year. Document policy: who can post to adjusting period, what requires adjusting entry. Soft close allows more flexibility but less control; hard close enforces discipline.
Multi-subsidiary: each subsidiary can have its own period status. Parent consolidation typically runs after all subs are closed or locked. Stagger close: subs close Day 3, consolidation Day 4, eliminations Day 5. Communicate timeline to all sub controllers. Use period lock permissions to restrict who can lock.
Reconciliation Workflows and Best Practices
Bank reconciliation: use NetSuite bank feeds and matching. Reconcile weekly or daily for high volume. Document matching rules. Exceptions: investigate and clear. AR reconciliation: aging by customer should tie to AR control. Run AR aging report; sum by aging bucket; compare to GL. AP similar. Inventory: perpetual vs. physical. Variance triggers adjustment. Investigate root cause.
Reconciliation saved searches: open bank lines, unreconciled AR, unreconciled AP. Custom record for rec sign-off: rec ID, period, account, preparer, reviewer, date. Workflow routes for approval when rec complete. Attach supporting documentation. Audit trail for who reconciled when.
Best practices: reconcile before close; do not close with unreconciled accounts. Material variances require explanation. Thresholds: investigate variances over X% or Y dollars. Document tolerance. Automated rec (e.g., bank match) reduces manual work but still needs review. Segregate duties: preparer vs. reviewer.
Variance Analysis and Flux
Variance analysis explains period-over-period changes. Compare current period to prior period, to budget. Material variances need explanation. Create saved searches or reports: balance by account, current vs prior. Calculate variance $ and %. Flag accounts with variance over threshold. Investigate: new customer, lost customer, timing, error.
Flux report: show movement in each account from prior to current. NetSuite reports or Excel export. Management review package: P&L flux, balance sheet flux, key metrics. Document explanations in memo or attachment. Use for board reporting, audit support. Automation: scheduled report with variance highlights.
Segment variance: by subsidiary, department, location. Consolidation adds complexity—ensure segment data rolls correctly. Budget vs actual: load budget, run variance report. Reforecast: update budget based on actuals. Integrate with planning tools if used. Variance analysis is iterative—refine accounts and thresholds over time.
Management and Board Reporting
Management reporting package: executive summary, P&L, balance sheet, cash flow, key metrics (revenue, margin, DSO, etc.). Customize for audience. Board package: higher level, strategic metrics, YoY comparison. Create report templates. Populate from NetSuite reports. Export to PDF or PowerPoint. Schedule distribution.
NetSuite reporting: Standard reports, Saved searches, Workbook. For formatted packages, often export to Excel for formatting. Consider NetSuite's Report Builder or Advanced PDF for branded output. Saved search for KPIs. Dashboard for real-time view. Segment reports by subsidiary, product, region.
Narrative: add commentary for variances. Store in custom record or external doc. Version control for package. Distribute via email or portal. Audit: retain packages for audit trail. Document report definitions. Review package content quarterly. Align with stakeholder needs.
Audit Trail and Compliance
NetSuite maintains audit trail for many actions: record create, edit, delete. Enable System Notes and User Event logging. Run System Notes report for changes to sensitive records. Export for audit. Retention: retain audit data per policy (e.g., 7 years).
Compliance: SOX, GAAP, industry-specific. Segregation of duties: different users for different steps. Period lock restricts posting. Approval workflows for journals. Access reviews: periodic review of who has what access. Restrict sensitive roles. Document controls. Test controls for audit.
Evidence: save reconciliation support, approval emails, variance explanations. Organize by period and account. Use File Cabinet or external DMS. Auditor may request samples. Prepare in advance. NetSuite's audit trail is foundational; supplement with documented procedures and evidence.
Multi-Currency and FX Translation
Multi-currency subsidiaries: each sub has base currency. Transactions in local currency. Consolidation translates to parent/reporting currency. Configure translation method: current rate, temporal, etc. FX translation creates unrealized G/L. Run Currency Revaluation for open balances. Realized G/L on settlement.
Translation accounts: map local accounts to reporting currency. NetSuite consolidation supports FX translation. Configure in subsidiary setup. Document rate source and update frequency. Period-end rates for balance sheet; average or spot for P&L per policy. Audit expects consistent application.
Hedges and derivatives: complex accounting. May need custom logic or add-on. Document FX policy. Variance in FX can be material—explain in management report. Test translation with sample data. Multi-currency adds close steps: revalue, translate, consolidate.
Segment and Department Reporting
NetSuite class (department, location) enables segment reporting. Tag transactions with class. Run reports by segment. Consolidation can roll by segment. Configure classes in Setup. Ensure all transactions have required segments. Default from customer, item, or user.
Segment reporting: P&L by department, balance sheet by location. Management wants to see segment performance. Saved searches filter by class. Workbooks combine segments. Hierarchy: parent segment rolls up child segments. Configure segment structure. Validate segment data quality.
Intercompany by segment: intercompany transactions may cross segments. Ensure segment is populated. Elimination by segment if reporting requires. Document segment definitions. Train users. Segment reporting enables decentralized management with consolidated view.
Budget vs Actual and Forecasting
Load budget into NetSuite (Budget record or import). Run Budget vs Actual report. Variance by account, by period. Use for management review. Reforecast: update budget based on actuals and outlook. Some orgs use external planning tools (Adaptive, Host Analytics) and sync to NetSuite.
NetSuite budgeting: create budget by account, period, optionally by class. Can upload from Excel. Report compares actual to budget. Roll forward prior year actual for baseline. Forecast: less formal than budget; updated more frequently. Document budget process and calendar.
Integration: planning tools push budget to NetSuite or pull actuals from NetSuite. REST, CSV, or middleware. Consolidate budget across subsidiaries. Budget vs actual at parent level. Variance reporting for board. Align budget with strategic plan.
Close Automation with Workflows and Scripts
Automate close steps with workflows and SuiteScript. Workflow: when period is locked, create task for consolidation. When consolidation complete, notify close manager. Trigger on record create/update. Reduce manual coordination.
SuiteScript: scheduled script runs reconciliations, flags exceptions. Script generates close package. Script locks period when checklist complete. Use script parameters for period, threshold. Log for audit. Test in Sandbox. Document automation. Balance automation with control—some steps require human judgment.
Celigo, Jitterbit: middleware can orchestrate close across systems. NetSuite + external GL + consolidation tool. Evaluate build vs buy for close automation. Start with high-impact, manual steps. Expand over time. Measure close cycle time; target reduction.
Troubleshooting Consolidation Issues
Common issues: unbalanced consolidation (debits don't equal credits), missing subsidiary data, incorrect elimination. Run Trial Balance by subsidiary before consolidate. Verify each sub's Trial Balance is balanced. Check elimination rules: correct accounts, correct mapping.
Intercompany out of balance: A's receivable from B should equal B's payable to A. Investigate timing (one side posted, other not), posting errors, wrong subsidiary on line. Run intercompany rec report. Correct before consolidating. Document resolution.
Currency: translation errors, wrong rate. Verify rate table. Check translation method. Re-run consolidation after corrections. Clear consolidation data and re-run if needed. Test in Sandbox first. Escalate to NetSuite support for product issues. Document workarounds.
Year-End Close Considerations
Year-end close includes additional steps: inventory physical count, fixed asset verification, accrued vacation, bonus accruals, tax provision, audit adjustments. Extend close timeline for year-end—often 2–3 weeks vs. 5 days for monthly. Create year-end checklist distinct from monthly. Coordinate with auditors: provide access, PBC list, supporting docs. Audit timeline may drive close completion.
Reserves and estimates: bad debt reserve, warranty reserve, litigation. Document methodology. Review adequacy annually. Adjusting entries: prior period adjustments require care—material items may need 8-K or similar disclosure. Restatements: avoid if possible; document if necessary. SEC filers: Form 10-K deadline. Private companies: lender or board deadline. Stagger: close books, draft financials, audit, file. Communicate with all stakeholders on timeline.
Rollforward: prior year comparative figures. NetSuite stores prior periods; ensure comparative reports include prior year. Footnote disclosures: segment data, related party, contingencies. Often prepared outside NetSuite in Word/Excel. Tie numbers to NetSuite. Distribution: board, investors, lenders. Archive: retain all workpapers, recs, support. Document year-end procedures. Debrief: what went well, what to improve for next year.
Accruals, Provisions, and Prepayments
Accruals: expense incurred but not yet invoiced. Create journal entry: debit expense, credit accrual liability. Reverse when invoice received. Common: accrual utilities, payroll taxes, professional fees. Use recurring journal or template. Document accrual methodology. Review prior accruals for reasonableness. Clear old accruals when no longer valid.
Provisions: estimated liabilities (warranty, litigation, restructuring). Estimate based on best information. Debit expense, credit provision. Adjust as facts change. Document provision review. Auditor will scrutinize provisions. Prepayments: expense paid in advance. Debit prepaid, credit cash. Amortize over benefit period. Recurring journal for amortization. Reconcile prepaid balance to schedule. NetSuite supports recurring journals—use for predictable accruals and amortization.
Cutoff: ensure accruals and provisions are in correct period. Document cutoff procedures. Material accruals require supporting documentation. Review with controller. Tie to subledger (AP aging for accruals). Audit expects clear audit trail. Test accrual rollforward. Document assumptions. Update for known changes (e.g., contract renewal, rate change).
Cash Flow Statement and Working Capital
Cash flow statement: operating, investing, financing. NetSuite can generate cash flow report. Ensure proper account classification (operating vs. investing vs. financing). Reconcile to balance sheet (beginning cash + cash flow = ending cash). Indirect method: start with net income, adjust for non-cash, working capital changes. Direct method: cash receipts and payments by category. Choose based on reporting requirement.
Working capital: AR, AP, inventory. Track changes for cash flow. Days in AR, days in AP, days in inventory. Optimize for cash flow. Reconcile working capital changes to cash flow. Management often wants working capital analysis. Use saved search for aging, inventory turnover. Segment by subsidiary. Document cash flow process. Review for reasonableness. Auditor will test cash flow.
Investing and financing: capex, debt, equity. Ensure proper classification. Non-cash transactions: disclose (e.g., capital lease). Cash flow forecast: project future cash. Often done in Excel. Use NetSuite actuals as base. Integrate with treasury. Document cash position. Reconcile bank to NetSuite. Cash flow close step: finalize cash flow statement, get sign-off.
Internal Controls and SOX Compliance
Internal controls ensure accurate financial reporting. Segregation of duties: different people for recording, approval, reconciliation. NetSuite supports role-based access—configure appropriately. Key controls: period lock (prevent unauthorized posting), approval workflows (journal entry, vendor bill), reconciliation (bank, AR, AP). Document control design. Test controls for effectiveness. Remediate deficiencies.
SOX (public companies): management assesses controls, auditor tests. Document control objectives, control activities, who performs, evidence. Risk assessment: identify financial reporting risks. Map controls to risks. Test design and operating effectiveness. Report deficiencies. Material weaknesses require disclosure. Private companies: may adopt SOX-like controls for lender or governance. Scale controls to company size.
NetSuite-specific: user access review (who has what), period lock (who can unlock), journal approval, sensitive transaction types. Change management: who can add users, modify workflows. Log review: unusual activity. Backup and recovery: test restore. Document NetSuite controls. Integrate with overall control framework. Train control owners. Annual review of controls.
Subsidiary Close Coordination
Multi-subsidiary close requires coordination. Define close order: which subs close first? Often subsidiaries with intercompany close first so both sides are complete. Parent or consolidation sub may close last. Communicate close calendar to all subsidiary controllers. Shared services: corporate allocations—when do they run? Allocation timing affects sub close. Centralized vs. decentralized: who owns sub close? Document responsibilities.
Close package: each sub submits package (trial balance, recs, variance explanations). Consolidation team reviews before consolidate. Reject if incomplete or errors. Use custom record or shared drive for package submission. Checklist: sub confirms all steps complete. Consolidation doesn't run until all subs signal ready. Exception: force consolidate with incomplete sub (document, investigate).
Timezone differences: international subs—coordinate timing. Cutoff: transaction date determines period. Ensure consistent cutoff across subs. Intercompany: both sides must post in same period for balance. Stagger close to allow for sub close, review, consolidation, eliminations. Typical: Day 1–3 sub close, Day 4 consolidation, Day 5 management review. Adjust based on complexity.
Revenue Recognition in Close
Revenue recognition (ASC 606) affects close. Ensure revenue arrangements are complete: identify performance obligations, allocate transaction price, recognize when satisfied. NetSuite Revenue Recognition: run recognition process. Reconcile deferred revenue to support. Verify recognition schedule. Adjustments: correct errors, true-ups. Document revenue policies. Auditor will review revenue recognition.
Deferred revenue: unearned revenue. Track by arrangement, by period. Amortize per schedule. Reconcile to contract or subscription data. Complex arrangements: multiple elements, variable consideration. May need Revenue Management add-on or custom logic. Document for audit. Revenue metrics: recognized vs. deferred. Segment reporting may require revenue by segment. Ensure segment tagging on revenue transactions.
Cutoff: revenue recognized in correct period. Shipment date, delivery date, or service completion. Document cutoff policy. Test cutoff—sample of transactions around period end. Revenue is often material—auditor focuses here. Coordinate with order-to-cash team. Reconcile revenue to shipments, invoices. Resolve discrepancies before close. Document support for audit.
Tax Provision and Deferred Taxes
Tax provision: estimate income tax expense for period. Current tax: based on taxable income. Deferred tax: temporary differences (e.g., depreciation, reserves). Create journal entry for provision. Reconcile to tax return when filed. Document provision methodology. Work with tax advisor. Complex for multi-jurisdiction, multi-entity. May use external tax software; journal in NetSuite.
Deferred tax assets and liabilities: track temporary differences. Valuation allowance if recovery not likely. Document valuation allowance assessment. Tax rate changes: adjust deferred taxes. FASB/IASB guidance on rate changes. Reconcile deferred tax rollforward. Auditor will review provision and deferred taxes. Maintain support for audit.
Tax accounts: current tax payable, deferred tax asset, deferred tax liability, tax expense. Ensure proper classification. Consolidation: tax by subsidiary. Parent may have separate tax. Intercompany: transfer pricing affects tax. Document tax positions. Uncertain tax positions: FIN 48/ASC 740-10. May need disclosure. Coordinate with tax team throughout close.
Lease Accounting and Close
ASC 842/IFRS 16: lessees recognize lease assets and liabilities. NetSuite has Lease Management or third-party integration. At close: ensure lease amortization and interest run. Reconcile lease schedule to GL. Document lease data. Modification: lease terms changed—remeasure. New leases: add to schedule. Reassess: variable payments, options. Auditor will test lease accounting.
Lessor accounting: different from lessee. Ensure proper classification (operating vs. sales-type vs. financing). Run lessor amortization. Reconcile. Document. Subleases: complex. Consider lease accounting software for high volume. NetSuite SuiteApp or integration. Document leases in central repository. Tie to GL. Close step: verify lease entries complete, reconcile.
Lease close checklist: new leases added, modifications processed, amortization run, reconciliation complete. Document. Audit support. Disclosure: lease footnote. Often prepared outside NetSuite. Tie numbers. Year-end: comprehensive lease review. Update assumptions (discount rate, term). Test for impairment. Document decisions. Integrate lease close into overall close timeline.
Audit Preparation and PBC Requests
Auditors request supporting documentation (PBC—Prepared By Client). Organize workpapers by account and period. Use File Cabinet or shared drive. Label clearly: account, period, preparer, date. Include: reconciliations, variance explanations, support for estimates. Index for auditor reference. Respond to requests promptly. Track open items. Document what was provided.
Common PBCs: bank recs, AR aging, AP aging, inventory reconciliation, fixed asset rollforward, accrual support, revenue recognition schedules. Prepare in advance of audit. Quality matters—sloppy workpapers extend audit. Review workpapers before submit. Tie to trial balance. Auditor will sample and test. Have backup ready. Document sources. Clear audit trail.
Audit timeline: coordinate with auditors on start date, interim vs. year-end, deadline. Provide access to NetSuite if needed (read-only, specific reports). Answer questions promptly. Escalate issues. Prior year: retain prior year workpapers for comparison. Auditor may ask "where did this number come from?"—document. Post-audit: address management letter points. Implement recommendations. Close debrief: what would make next audit smoother?
Close Calendar and Timeline Design
Design close calendar to fit your business. Monthly close: typical 5–10 business days. Define day-by-day tasks. Day 1: sub ledgers complete (AR, AP, inventory). Day 2–3: reconciliations. Day 4: adjusting entries, review. Day 5: lock, consolidation. Adjust for complexity. High-volume: may need more days. Simple: may close in 3. Document calendar. Communicate to team. Publish calendar for visibility.
Dependencies: some tasks block others. Reconciliations before lock. Consolidation after all subs closed. Use Gantt or checklist with dependencies. Identify critical path. Buffer for surprises. Holiday periods: extend timeline. Year-end: often 15–20 days. Audit deadline drives. Board meeting: when do they need numbers? Align close completion with reporting needs. Stagger: finance closes first, then operational reports.
Roles and responsibilities: who does what, when. Controller owns close. Accountants own specific areas. Shared services: corporate team supports subs. Document in RACI or similar. Escalation: when tasks late, who to notify? Daily stand-up during close. Track percent complete. Blocker log. Post-close: debrief. What delayed? How to improve? Update calendar for next period. Continuous improvement.
Footnote and Disclosure Support
Financial statement footnotes require data from NetSuite. Segment data: revenue, assets by segment. Related party: intercompany, key management. Commitments: leases, contracts. Contingencies: litigation, guarantees. Often compiled in Word/Excel. Source data from NetSuite reports. Tie footnote numbers to trial balance. Document sources. Version control for footnote drafts.
Disclosure checklist: standard list of required disclosures per GAAP/IFRS. Go through each. Where does data come from? NetSuite, external, or management estimate. Update checklist for new standards. New standards (e.g., ASC 842) add disclosures. Coordinate with accounting team. Auditor reviews footnotes. Provide support. Materiality: focus on material disclosures. Immaterial items may be omitted (with documentation).
XBRL and filing: SEC filers tag financials. NetSuite may have reporting features. Often use external tool (Workiva, Toppan Merrill). Export data from NetSuite. Map to taxonomy. Review tagged data. File with SEC. Private companies: no XBRL. But may need GAAP disclosure for lenders. Document process. Retain files. Update for rule changes. Footnote close step: finalize disclosures, get sign-off.
Interim Reporting and Quarterly Close
Quarterly close: similar to monthly but more comprehensive. Review all balance sheet accounts. Full reconciliation. Variance analysis vs. prior quarter and prior year. Management discussion. Often tighter deadline (10-Q filing). Scale team for quarter. Document quarterly procedures. May have different checklist than monthly. Year-over-year comparison. Seasonal businesses: explain seasonality in variance.
Interim reporting: less comprehensive than annual. Some accounts estimated. Inventory: may use perpetual, not full physical. Accruals: may use formula or prior year. Document what is reviewed at interim vs. year-end. Auditor may do limited review for interim. Focus on material changes. Segment data: quarterly segment reporting. Update forecast. Board package quarterly. Investor update. Earnings release: numbers from NetSuite. Coordinate with IR.
Quarterly calendar: define tasks, owners, dates. More tasks than monthly. Tax estimates. Reserve reviews. Disclosure updates. Coordinate with legal for contracts, litigation. Document quarterly process. Distribute timeline. Track completion. Debrief after each quarter. Refine for next. Balance thoroughness with speed. Material items: full support. Immaterial: reasonable review. Document level of review for audit.
Appendix A: Close Checklist Templates
Monthly Close Checklist Template
| # | Task | Owner | Due | Dependencies |
|---|---|---|---|---|
| 1 | Sub-ledgers complete (AR, AP, Inventory entries) | Accounting | Day 1 | — |
| 2 | Bank reconciliation | Accountant | Day 2 | Bank statement available |
| 3 | AR aging review and reconcile to GL | AR Team | Day 2 | All invoices posted |
| 4 | AP aging review and reconcile to GL | AP Team | Day 2 | All bills posted |
| 5 | Inventory reconciliation (perpetual vs. physical) | Inventory | Day 2 | Receipts/shipments complete |
| 6 | Accruals and prepaids (recurring journals) | Controller | Day 3 | Recs complete |
| 7 | Variance analysis (P&L flux) | Controller | Day 3 | All entries posted |
| 8 | Subsidiary close (each sub) | Sub Controller | Day 3 | Tasks 1–7 per sub |
| 9 | Intercompany reconciliation | Consolidation | Day 4 | All subs closed |
| 10 | Run consolidation | Consolidation | Day 4 | Intercompany balanced |
| 11 | Verify eliminations | Consolidation | Day 4 | Consolidation complete |
| 12 | Lock period | Controller | Day 5 | All recs signed off |
| 13 | Management package (P&L, B/S, variance) | Controller | Day 5 | Period locked |
Year-End Close Checklist Additions
| # | Task | Owner | Notes |
|---|---|---|---|
| 14 | Physical inventory count | Operations | Reconcile to perpetual; post adjustments |
| 15 | Fixed asset verification | Accounting | Rollforward; depreciation review |
| 16 | Accrued vacation / PTO | HR / Accounting | Review policy; accrue per plan |
| 17 | Bonus accrual | Controller | Estimate; document methodology |
| 18 | Tax provision | Tax | Current and deferred tax |
| 19 | Reserves review (bad debt, warranty) | Controller | Document adequacy |
| 20 | Lease accounting (ASC 842) | Accounting | Amortization run; reconcile |
| 21 | Revenue recognition (ASC 606) | Accounting | Deferred revenue reconciliation |
| 22 | Footnote preparation | Controller | Segment, related party, contingencies |
| 23 | Audit PBC preparation | Accounting | Index workpapers; respond to requests |
Custom Record Field Template for Checklist
Create a custom record type Close Task with fields:
- Name (Text): Task description
- Task Number (Integer): Sequence for ordering
- Owner (Select: Employee): Responsibility
- Due Day (Integer): Day of close (1–10)
- Status (Select: Not Started | In Progress | Complete)
- Period (List: Accounting Period): Links to period
- Subsidiary (Select: Subsidiary): For sub-specific tasks
- Dependencies (Text): Task numbers that must complete first
- Completed Date (Date): When task was marked complete
- Notes (Text Area): Blockers, adjustments
Use workflow to send reminder emails when period opens. Create a saved search filtered by Period = Current and Status ≠ Complete for dashboard. Run weekly during close. Export to Excel for status meeting. Adapt task list for your industry and company size. Single-entity companies need fewer steps; multi-subsidiary adds consolidation tasks. Document your checklist in an SOP and review annually.
Appendix B: Reconciliation Sign-Off Template
Bank Reconciliation Sign-Off
| Field | Value |
|---|---|
| Account | [Bank account name/ID] |
| Period | [MM/YYYY] |
| Statement Date | [Date] |
| Statement Balance | [Amount] |
| NetSuite Balance | [Amount] |
| Reconciled? (Y/N) | Y |
| Preparer | [Name] [Date] |
| Reviewer | [Name] [Date] |
Subsidiary Close Checklist (Per Sub)
For each subsidiary, complete before consolidation: (1) All transactions posted for period. (2) Bank rec signed off. (3) AR aging reconciled to control. (4) AP aging reconciled. (5) Inventory rec complete (or N/A). (6) Accruals posted. (7) Intercompany balances verified with counterparty. (8) Variance explanations documented. (9) Period locked. Create a custom record or spreadsheet with subsidiary, task, status, sign-off. Submit to consolidation team before consolidate run.
Financial Close Best Practices Summary
Use a close checklist. Reconcile before lock. Document procedures. Segregate duties. Automate where possible. Review variances. Prepare management package. Retain audit trail. Test in Sandbox. Communicate timeline. Train team. Review process annually. Multi-subsidiary: close subs first, then consolidate. Intercompany must balance. Document elimination logic.
YRK Consulting supports financial close and consolidation. Contact us for close process design and optimization.