An accounting close involves the preparation of a company's financial statements for a period, for example, monthly, quarterly, or yearly. Under this process, all of the company's financial transactions for the period are recorded by calculations. The results are then summarized and recorded as financial statements. Accounting close is critical for businesses to ensure the financial statements accurately reflect the business performance for the period.
An accounting close process commonly entails: a) Collecting information like accrued expenses, inventory count, and general ledger; b) Cross-checking records; c) Accounts reconciliation; d) Drafting and finalizing financial statements; e) Final review and sign-off by management