Month-end close checklist: close your books by the 5th

A month-end close checklist is a fixed set of steps that turns a month of bank entries, invoices, bills and salaries into numbers you can trust. For most Indian startups, the books can be closed by the 5th of the next month if you work in a set order: bank first, then sales and bills, then payroll and TDS, then accruals, then review and lock. This guide walks through each of the five days.

Who this is for: founders and finance leads at startups and small companies, roughly 5 to 200 people, who close the books themselves or with a small team and a CA who reviews.

Why month-end runs to the 25th

Most companies don't close late because the work is hard. They close late because the work arrives late and in the wrong order.

The bank statement sits in someone's inbox. Half the vendor bills are on WhatsApp. Someone books salaries before the reimbursements are approved, so the entries get redone. The CA asks for the same three documents twice. By the time everything is in, it's the 20th, GST is due, and the board pack goes out on the 25th with numbers nobody fully believes.

The fix is a routine with a fixed order and a fixed owner for each step. The order matters because each step depends on the one before it. You can't book accruals properly until you know which bills arrived. You can't trust the P&L until the bank is matched.

Here is the routine we use.

"Day" means working day. If the month ends on a Thursday, Day 1 is the Friday.

Day 1: start the month-end close with the bank

The bank is the one record nobody can argue with. Start there.

1. Download every statement. Every current account, every savings or sweep account, every payment gateway settlement report, and every company card. Missing one account is the most common reason books don't tie.
2. Match each line. Every credit should match a customer payment, a refund, interest or a capital receipt. Every debit should match a bill, a salary, a tax payment, a bank charge or a transfer between your own accounts.
3. Explain what doesn't match. Some lines won't have a document yet. Write a short note against each one ("Razorpay settlement, invoice details pending") so you can chase it on Day 2.
4. Agree the closing balance. The balance in your books for each bank account should equal the bank's closing balance, after allowing for cheques issued but not cleared and deposits not yet credited.

If you've never reconciled before, our plain-English guide to bank reconciliation for startups covers it with a worked example.

A tip that saves hours: set rules for lines that repeat. Bank charges, the monthly rent transfer, your software subscriptions and payment gateway fees appear every month. Once there's a rule, they match themselves and you only look at the exceptions.

Day 2: sales invoices and vendor bills

Now make sure every invoice and every bill for the month is in the books.

Sales

• Every invoice raised in the month is booked, with the right GST rate and place of supply.
• Credit notes for returns or discounts are booked in the same month.
• Customer payments matched on Day 1 are applied to the right invoices, so your debtors list is accurate.

Bills

• Collect every vendor bill dated in the month: email, WhatsApp, the courier envelope on someone's desk. Agree one place where bills go, and one person who checks it.
• Check each vendor's GSTIN and the invoice details before you treat the input tax as claimable. Credit generally depends on the supplier reporting the invoice in their own return, so a wrong GSTIN costs you money later.
• Book each bill against the right expense head and cost centre. Consistent heads are what make month-on-month comparison possible on Day 5.

Check against the bank. Any payment matched on Day 1 without a bill is now a gap you can chase by name: "We paid ₹42,000 to the design agency on the 14th. Please send the invoice."

GSTR-1 for monthly filers is due on the 11th of the following month and GSTR-3B on the 20th, so a clean Day 2 means your GST work starts from settled numbers. For every date in one place, see our GST and TDS due dates calendar.

Day 3: payroll, PF, ESI and TDS

Day 3 is about people costs and the taxes that come with them.

1. Book salaries. Gross salary by employee or department, deductions, and net pay as paid on Day 1. If salaries are paid in the first week of the next month, book them as owed at month end.
2. Work out PF and ESI. Employer and employee contributions for everyone covered. Both are generally due by the 15th of the following month. Check the EPFO and ESIC portals for your establishment's current rules.
3. Work out TDS. On salaries, rent, contractors, professional fees and commission. TDS deducted in a month is generally due to the government within seven days after the month ends, so by the 7th, with March deductions due by 30 April. From 1 April 2026 these deductions sit under the Income-tax Act, 2025, so check section references with your CA if your templates still quote the old numbers.
4. Professional tax. If your state levies it, work out and book it. Dates vary by state.
5. Reimbursements. Book approved employee expense claims for the month, with receipts.

Because TDS is due by the 7th, Day 3 often lands right before a payment deadline. Treat it as the day you prepare and schedule the payment, not the day you discover it.

Day 4: accruals and the small entries that matter

Accruals are what make a P&L honest. They record costs that belong to this month even though the bill hasn't arrived, or was paid earlier.

Each of these is small on its own. Together they're the difference between a month that looks great and a month that is great. Skipping accruals is the most common reason a startup's P&L swings wildly from month to month for no real reason.

Keep a standing list of recurring accruals (rent, retainers, annual subscriptions, depreciation) so Day 4 takes an hour, not a day.

Day 5: review, lock and send

The last day is for looking at the numbers like an investor would.

1. Compare. Put this month next to last month and next to budget. Look at every line that moved by more than 10%, or by more than an amount that matters for your size, say ₹50,000.
2. Explain. Write one line for each big movement. "Marketing up ₹3,20,000: conference sponsorship, one-off." If you can't explain a movement, something is probably booked wrong.
3. Check the balance sheet. Bank balances tie to statements. Debtors and creditors lists tie to their ledgers. GST and TDS payable match what you worked out on Days 2 and 3. Nothing sits in a "suspense" or "miscellaneous" account.
4. Lock the month. Once locked, nobody can add or change entries dated in that month without unlocking it, with a record of who did it and why. This protects the numbers you report to your board and use for returns.
5. Send the board pack. P&L, cash, runway and the one-line explanations. Our board pack template shows what to include.

When the month is locked by the 5th, everything downstream gets easier: GST is filed from settled numbers, your investor update goes out on time, and your CA reviews a clean set of books instead of rebuilding them.

Who does what

A close only runs on time when each step has a name next to it.

Common mistakes

• Starting with the P&L instead of the bank. You end up explaining numbers that are wrong.
• Missing a bank account or card. The books never tie and nobody knows why.
• No single place for bills. Bills scattered across inboxes and chats are the biggest cause of a late close.
• Skipping accruals. Your margins jump around and your board stops trusting the numbers.
• Never locking the month. Someone edits September in November, and your filed GST no longer matches your books.

Questions people ask

How long should a month-end close take for a startup?

For a company with up to about 50 people and one or two bank accounts, five working days is realistic once the routine is set. The first few months take longer while you clear old unmatched entries. After that, most of the time goes on the bank and on chasing missing bills.

What is the first step in a month-end close?

Start with the bank. Upload every bank statement for the month and match each entry to an invoice, bill, salary or tax payment. Unmatched lines are where errors hide, so clearing them first makes every later step faster and more accurate.

Do I need to finish GST before closing the books?

Not finish filing, but you need every sales invoice and purchase bill in the books before you prepare GST returns. GSTR-1 for monthly filers is due on the 11th and GSTR-3B on the 20th, so a close by the 5th gives you a clean base for both.

What does locking the month mean?

Locking stops anyone from adding, changing or deleting entries dated in that month. It protects the numbers you have already reported to your board and used for GST. If a correction is needed later, you unlock with a note of who did it and why.

Can a founder close the books without a CA?

You can run the monthly routine yourself or with a junior accountant, especially with software that matches bank entries. Keep your CA for review, tax positions, audit and anything unusual. Most founders find a monthly CA review of the closed books is enough.

Sources

• GST Portal: return due dates and filing (opens in a new tab)
• Income Tax Department of India (opens in a new tab)
• TaxGuru: TDS deposit deadline under the Income-tax Act, 2025 (Rule 218) (opens in a new tab)
• EPFO (opens in a new tab)
• ESIC (opens in a new tab)

This is general information, not accounting or tax advice. Check with your CA for your company's situation.