# Manufacturing Month-End Close Checklist > Source: https://netray.co/tools/manufacturing-month-end-close-checklist > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Free Tools ## Short answer A practical close checklist for manufacturing plants: cut-off, receipts, WIP, variances, overhead, inventory and reconciliations. ## Category cost-finance ## Industry Discrete Manufacturing ## Audience - CFO - Controller - Cost accountant - Plant accountant ## Tool **Kind:** checklist **Scoring Note:** Tick each item as completed. Items marked critical must be finished before you release the close. A score below 80 percent means the close is at risk of restatement or late adjustment. **Groups:** #### Cut-off and transactions **Items:** **Text:** Lock the inventory and production transaction period in the ERP after the cut-off time **Critical:** true **Text:** Confirm all goods receipts are posted in the correct period **Critical:** true **Text:** Review received-not-invoiced balance and accrue for it **Critical:** true **Text:** Confirm shipments and invoices are cut off at the same date **Critical:** true Check for open transactions in staging or error queues Post accruals for utilities, freight and unbilled services Review intercompany transfers in transit #### Inventory and WIP **Items:** **Text:** Reconcile the inventory subledger to the general ledger by account **Critical:** true **Text:** Reconcile WIP by job to the WIP account and investigate differences **Critical:** true Close or cancel completed and obsolete work orders **Text:** Review negative on-hand balances and correct them **Critical:** true Process cycle count adjustments and approve shrinkage Review slow moving and obsolete stock and update the reserve Run a lower of cost and net realizable value test on at-risk items Confirm consigned and customer-owned inventory is excluded #### Costing and variances **Items:** **Text:** Run labor and overhead absorption and confirm rates applied **Critical:** true Review purchase price variance by supplier and part Review material usage, labor rate and efficiency variances by work center **Text:** Settle production order or job variances to the correct accounts **Critical:** true Calculate over or under applied overhead and post the adjustment Review scrap and rework cost against budget Check standard cost changes made in the period are approved and documented Write a short commentary on variances above the threshold #### Payroll, fixed assets and accruals **Items:** **Text:** Reconcile direct labor hours booked to time-and-attendance **Critical:** true Accrue wages, bonus and vacation liabilities Post depreciation and confirm new assets are capitalized Review capital project spend and move completed projects out of construction in progress Review prepaid expenses and warranty reserve #### Reconciliation and reporting **Items:** **Text:** Reconcile accounts payable and receivable subledgers to the ledger **Critical:** true Reconcile bank and cash accounts Review foreign currency revaluation and post the entry Review the trial balance for unusual movements **Text:** Prepare the COGM and COGS schedule and tie to the income statement **Critical:** true Produce the flash report with gross margin and key variances Get plant manager sign-off on operational explanations Lock the financial period and archive the close package ## Content **Intro:** A manufacturing close is longer than a service company close because inventory, WIP and variances have to be right before margins can be trusted. This checklist orders the work so that cut-off and subledger issues are found early, not on the last day. **Sections:** #### How to use the checklist **Body:** Work through the groups in order, and tick items as they are completed. Items marked critical block the close: if one fails, the financial statements may be materially wrong. Assign an owner and a due working day to every item the first time you use the list, then keep the same assignments each month. Export the ticked list to PDF as the close evidence for your auditors. **Bullets:** - Assign an owner and a working-day target to each line - Run reconciliations before variance analysis, not after - Keep a record of adjustments and who approved them - Add plant-specific items such as customs, tooling or consignment #### Why the order matters **Body:** Cut-off errors flow into everything downstream. A receipt posted in the wrong period distorts inventory, accounts payable and PPV together. Fix transactions first, then reconcile subledgers, then review costing and variances, and only then prepare the management report. If you analyze variances before reconciling, you will analyze numbers that change. #### Typical problem areas **Body:** Negative inventory balances, jobs that are complete but still open, unprocessed receipts and unmatched invoices cause most late adjustments. Over or under applied overhead is another: if the rate was set from a budget that no longer fits, the adjustment can be large. Set a materiality threshold for investigation so effort goes to the largest items first. #### Speeding up the close **Body:** Plants that close quickly usually do three things: they run daily exception reports (negative stock, unposted transactions, unmatched receipts), they lock the period in the ERP on a fixed schedule, and they automate the standard reconciliations. Each of these converts last-day surprises into small daily fixes. A 5 to 6 working day close is a realistic target for a mid-size plant, though complexity and multiple entities add time. **Cta:** Many of these checks can be run automatically as exception reports from your ERP data. We can help set up read-only close monitoring. Ask for an expert review. **Faq:** #### How long should a manufacturing close take? **Answer:** A mid-size single-plant company can often close in 5 to 8 working days. Multi-entity groups with intercompany and currency work usually take longer. Faster is possible when exceptions are cleared daily. #### Which items are always critical? **Answer:** Cut-off, inventory and WIP reconciliation, variance settlement, overhead absorption and the COGM to COGS tie-out. These directly determine gross margin and inventory on the balance sheet. #### Do I need to count inventory every month? **Answer:** Not usually. Cycle counting through the year with a full count or a statistical count at year end is common. You do need to review negative balances and count adjustments each month. #### Can I customize the list for my ERP? **Answer:** Yes. Add the exact ERP steps, such as your period-end transaction codes or job settlement runs, to the matching items and keep the list under version control with your close calendar. ## Search terms manufacturing month end close checklist, month end close checklist template, inventory month end close, cost accounting month end checklist, plant accountant close tasks, month end WIP and variance review, financial close checklist manufacturing --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json