Accounting Month-End Close Best Practices

Month-end close is not just an accounting deadline. It is a measure of operational discipline.

The accuracy of your financials depends on how consistently processes are executed across accounts receivable, accounts payable, general ledger, parts, service, and sales. Fusion provides the structure to support a controlled and repeatable close. The results, however, depend on how intentionally that structure is used.

A strong month-end close is built on three principles: control your periods, trust your setup, and reconcile consistently.

Control the Period Before You Close It

Timely period management reduces errors before they happen.

The Fiscal Year Parameters application in Fusion allows accounting teams to:

• Open and close accounting periods
• Schedule periods to close automatically
• Prevent users from posting into prior periods
• Post net income to Retained Earnings at year-end

Closing prior periods limits accidental back-posting and helps standardize timelines across departments. Scheduling period closes reinforces internal deadlines and supports consistent execution of the close process.

When year-end adjustments are complete, retained earnings can be calculated and posted within the same application, creating a controlled transition into the new fiscal year.

The discipline of closing periods on time is one of the simplest ways to strengthen the reliability of your financial reporting.

Reduce Correcting Entries by Reviewing Accounting Setup

Frequent month-end correcting journal entries often point to configuration issues rather than user mistakes.

The Accounting Setup application determines which General Ledger accounts transactions post to across parts, service, sales, and lease rental. If transactions are consistently landing in the wrong account, the configuration should be reviewed.

Fusion allows accounting teams to search Accounting Setup by GL account to identify all items mapped to that account. This targeted review helps:

• Identify misaligned mappings
• Reduce repetitive correcting entries
• Improve confidence in automated posting

When Accounting Setup is aligned properly, transactions flow cleanly to the GL and month-end becomes a validation process rather than a repair process.

Use Account Reconciliation Intentionally

Account Reconciliation in Fusion can be used for any GL account, though it is most commonly used for bank reconciliation.

Before beginning reconciliation, organizations should decide whether to reconcile by branch or across all transactions. That structure must remain consistent moving forward.

Once a reconciliation is finalized, it is important to immediately review General Ledger transactions to identify unreconciled items, since those items do not appear on the reconciliation report itself.

A consistent reconciliation rhythm strengthens financial visibility and reduces surprises during the close.

Verify User Permissions as Part of the Close

Month-end efficiency is directly tied to access control.

Users should have access to the applications required for their role, and nothing beyond that. Verifying permissions supports segregation of duties and reduces risk.

Fusion provides tools to support this review, including:

• The Request Group Permissions report
• Permission reporting through Fusion Report Writer (FRW)

Periodic review of user access ensures that internal controls remain aligned with operational responsibilities.

Archive the Right Reports at the Right Time

Certain accounting and inventory reports in Fusion are point-in-time reports. Once the period changes, those reports cannot be recreated for prior dates.

KOLD serves as a cloud-based archive for these reports. At go-live, key point-in-time reports are typically scheduled to archive automatically. Organizations can also schedule additional reports to be sent to both KOLD and email to ensure accessibility and retention.

Access to KOLD should be tightly controlled, as it does not follow the same permission structure as Fusion.

Best practice is simple: if a report supports your close and cannot be recreated later, ensure it is archived.

What to Review Each Month

A reliable close depends on consistent review across core areas.

Accounts Receivable

• Schedule the AR Aging report, as it is point in time
• Verify AR is in balance using the AR Detail Not Matching report
• Review past due accounts and collectability
• Maintain delinquency and past-due controls
• Clean up voided invoices, unapplied payments, and bad debt write-offs

Identifying AR discrepancies weekly rather than monthly reduces research time and supports stronger cash flow management.

Accounts Payable

• Confirm AP is in balance using the AP Detail Not Matching report
• Verify AP Aging balances to the AP liability
• Review old AP invoices and posting references

The Posting Reference Reconciliation process is especially important in parts operations. Received inventory and AP invoices must align to maintain accurate inventory valuation.

General Ledger

• Review Balance Sheet, Income Statement, and Trial Balance
• Confirm Net Income is correct
• Verify each branch balances individually
• Confirm inter-branch accounts net to zero across all branches
• Reconcile Cash Clearing daily
• Review controlled accounts using the GL Controlled report

Cash Clearing should remain a zero-balance account and is best monitored daily to prevent buildup.

Controlled accounts, including inventory and other scheduled accounts, should be reviewed regularly to ensure transactions are posting correctly.

Inventory

Inventory reconciliation requires coordination between accounting and operations.

For Parts Inventory:

• Reconcile Parts Inventory to the GL monthly
• Archive Inventory Valuation and Parts Allocation reports, as they are point in time
• Review Posting Reference and miscellaneous purchase order reconciliation reports
• Address quantity adjustments and cycle count variances promptly

For Sales Inventory:

• Confirm new and used inventory balances to the Sales module
• Archive the Detailed Unit Aging report
• If using floor plan functionality, verify balances align with GL controls

For Work in Process:

• Reconcile Labor Inventory monthly
• Archive the Service Work in Process report

When these reviews occur consistently, inventory-related discrepancies are identified early and resolved efficiently.

A Strong Close Is Built on Consistency

Month-end close is not defined by a single report or adjustment. It is the result of disciplined processes, accurate setup, controlled access, and consistent reconciliation.

Fusion provides the framework to support that discipline. When accounting teams use the available tools intentionally and consistently, month-end becomes more predictable, repeatable, and easier to manage.

Take the Next Step

If you are evaluating ways to strengthen your month-end process, it may be time to review your current setup and controls.

Reach out to your Client Success Manager or contact Professional Services at professionalservices@karmak.com to discuss your current close process and identify opportunities to strengthen accuracy, efficiency, and internal controls.

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