Month-end close checklist for Saudi and GCC finance teams

What is a month-end close?

The month-end close is the routine a finance team runs after each month ends to make sure the ledger is complete and correct before anyone reports on it. Every transaction that belongs to the month is in it, every balance-sheet account is reconciled, estimates such as accruals are booked, and the month is then signed off and locked against further changes.

The output is a trial balance you can stand behind and the management accounts built from it. The close is also where most errors surface: a missing supplier bill, a receipt applied to the wrong customer, a bank charge nobody booked.

In Saudi Arabia and the GCC the close usually carries more than the basics. Many companies belong to groups with several entities and currencies. VAT, withholding tax and zakat workings depend on the month's figures, and boards often want reports in both Arabic and English. The checklist below covers those steps too.

How do you schedule the close by working day?

Give every task a working day counted from month end, an owner and a reviewer. Working day 1 (WD1) is the first working day after the month ends; tasks before month end take negative numbers. Count working days with your company's own weekend and public holidays, which differ across GCC countries, and plan ahead when an Eid holiday falls near month end.

Tasks depend on each other. Accruals need the cut-off, the intercompany agreement needs both companies' entries, and the variance review needs everything else. Write those dependencies into the checklist, so a late task shows its knock-on effect early.

The month-end close checklist, step by step

Skip the steps that do not apply to you, such as inventory for a services company, and add your own.

1. Confirm the cut-offMake sure sales invoiced and goods or services received by the last day are in the month, and that nothing from the next month has slipped in.
2. Apply receipts and clear unapplied cashMatch customer receipts to the invoices they pay, so the receivables ledger shows who still owes what. Receipts you cannot identify go to a suspense account with an owner, not into revenue.
3. Reconcile every bank accountAgree each bank statement to the ledger and explain every difference. Book bank charges and any profit the bank credited. Our bank reconciliation guide walks through it.
4. Book accruals and reverse last month'sAccrue goods and services received but not yet billed, and recurring costs such as rent or retainers that have not been invoiced. Reverse the previous month's accruals so the real invoice does not double the cost.
5. Amortise prepayments and check recurring journalsRelease the month's share of prepaid rent, insurance and subscriptions. Check that every journal that normally posts each month, such as depreciation or allocations, has posted at about its usual amount.
6. Post payroll and reconcile payroll liabilitiesAgree salaries, deductions and social insurance balances to the payroll register, and update the end-of-service provision.
7. Run fixed assets, leases and inventoryRun depreciation, review additions and disposals, run the lease schedules and reconcile lease liabilities. Where you hold stock, confirm quantities and agree the stock value to the ledger.
8. Recognise revenueRecognise contract revenue for the work delivered in the month, and reconcile deferred revenue and contract balances.
9. Tie out receivables and payablesAgree the customer and supplier subledgers to their control accounts in the ledger. A difference usually means a manual journal was posted straight to a control account.
10. Complete exchange rates and revalueLoad closing rates for every currency you hold and revalue foreign-currency balances. Reconcile each account in its own currency first, so an exchange rate cannot hide a real difference.
11. Agree intercompany balancesConfirm each balance with the counterpart company before consolidation, so the eliminations are right when the group accounts are prepared.
12. Prepare the tax workingsPrepare the VAT and withholding tax workings for the period and update the zakat or income tax provision. Agree the invoices in the ledger with your e-invoicing records. Filing rules and dates are in our guide to VAT returns in Saudi Arabia and the UAE.
13. Reconcile the rest of the balance sheetReconcile every remaining balance-sheet account, starting with cash, control accounts, tax and suspense. Clear suspense balances, or give each item an owner and a date.
14. Review the trial balance and variancesCheck that the trial balance balances for each company, that every new account is mapped to the reporting structure, and that every large movement against last month and the budget has an explanation.
15. Sign off, lock and reportSign the month off and lock it in the ERP, then issue the management accounts and the board pack.

What is different about a close in Saudi Arabia and the GCC?

The steps are the same as anywhere. What changes is the number of entities, currencies and local workings that hang off the monthly figures.

• Tax workings each period. VAT and withholding tax workings are built from the month's ledger, and the zakat or income tax provision needs updating. Close the books first, then prepare the workings from the closed figures, so the return and the accounts agree.
• E-invoicing. Where e-invoicing applies, the invoices in your ledger should agree with what was issued through your e-invoicing solution. Our guide to ZATCA e-invoicing (Fatoora) explains the system.
• End-of-service provision. Updating it every month keeps the liability current and avoids a large adjustment at year end.
• Groups and currencies. Groups often span Saudi Arabia, the UAE and other countries, each company on its own ERP and currency. Reconcile each company in its own currency, then translate and consolidate.
• Hijri dates. Some documents carry Hijri dates: make sure each is booked in the right month of the ledger's calendar.
• Two languages. Boards and lenders often ask for reports in Arabic and English. Keep one set of numbers and one chart of accounts behind both.

What should be true before you sign off the month?

Sign off only when a fixed set of checks passes for each company. These are the usual ones. Write yours down, so the sign-off means the same thing every month.

• The trial balance balances in each company's own currency.
• Every bank account is reconciled, with no unexplained lines.
• Receivables and payables agree with their control accounts.
• Every profit and loss account is mapped to the reporting structure.
• Exchange rates are complete for every currency used in the month.
• Intercompany balances agree with the counterpart company.
• Every close task is done and every required reconciliation is reviewed.
• No critical anomaly is still open.

The person who prepares a reconciliation should not be the one who reviews it, and the person who signs off should not be the only one who did the work. Our guide to approval matrices and segregation of duties shows how to split those roles in a small team.

After sign-off, lock the period in the ERP. If a month has to be reopened, record who reopened it and why. Then watch for entries back-dated into a closed month: they change figures you have already reported.

What usually delays the close?

Most late closes come from a few causes, and almost all of them start before month end.

Which close steps can you automate?

Automate the steps that follow a rule and keep the judgement with people. Matching, tie-outs and checks follow rules. Deciding an accrual for a disputed invoice, the size of a provision or whether the month is ready does not.

• Good candidates: importing statements, matching bank lines, checking recurring journals, proposing accruals and their reversals, amortising prepayments, tying subledgers to control accounts and running the sign-off checks.
• Keep with a person: approving journals, judging estimates and provisions, clearing unusual items and signing off the month.

Whatever you automate, keep the evidence: what was matched and by which rule, who approved each journal, and when the month was signed off. Auditors ask for it, and it lets the next close start from a clean month.

Questions people ask