Close a month of bookkeeping with a clear evidence trail

Set the period and responsibility

Choose the month being closed, the person preparing it and the person reviewing it. Agree a document cutoff with the owner so that late invoices do not disappear into next month without explanation. Keep a log of records received after the first review.

Decide what the business needs from the close: reliable customer balances, upcoming supplier payments, a view of cash or a management report. Use the same core account names each month so that comparison remains useful. Record changes to classifications and explain material corrections to the reviewer.

Gather the inputs before reconciling

• Complete bank and credit card statements for every business account.
• Sales invoices, credit notes, receipts and payment platform settlement reports.
• Supplier invoices, supplier statements and approved expense claims.
• Payroll summaries, authorised changes and evidence of payments.
• Loan statements, asset purchases and inventory movement records where relevant.
• Last month’s closing balances and unresolved item list.

SARS explains the underlying record obligations on its record keeping page. Keep documents for the applicable legal period and longer where an audit, dispute or another obligation requires it. Do not apply a blanket deletion date to every record.

Complete the monthly close

1. Check completeness. Compare the list of accounts and sales channels with the records received. Mark missing statements explicitly rather than treating an empty folder as zero activity.
2. Record source transactions. Capture invoices and credit notes with the correct dates and references. Keep transfers between business accounts separate from sales or operating expenses.
3. Reconcile cash movements. Match the books to each bank, card and payment platform statement. Identify timing differences, fees and duplicated entries. Do not post an unexplained balancing amount simply to remove a difference.
4. Review unpaid balances. Compare customer and supplier lists with supporting records. Investigate old credits, disputed amounts and payments that have not been matched.
5. Review special items. Separate asset purchases, loan movements, payroll and owner transactions for appropriate treatment. Document the reviewer’s decision where the correct classification is unclear.
6. Prepare and approve the reports. Compare the result with the prior month and budget, explain significant movements and record approval. Carry unresolved items forward with a named owner.

Check VAT evidence separately

For a VAT vendor, review the documents behind tax amounts before preparing a return. A payment description does not supply every detail needed for VAT treatment. Use the SARS tax invoice guidance to check the relevant invoice requirements.

Separate the question “Did we pay this?” from “What tax treatment applies?”. Personal spending, mixed use, exempt supplies and missing evidence can require additional review. A supplier charging an amount labelled VAT is not enough to settle the business’s entitlement to deduct it.

Keep the VAT working paper linked to the underlying transactions. Read the obligations of a VAT vendor alongside the applicable return guidance.

Build a review pack someone else can follow

Add the report version, preparation date and reviewer. Save the final copy separately from the working version so that later changes can be traced.

Investigate common differences

A payment processor deposit is smaller than sales: compare its settlement report with gross transactions, refunds and fees. Do not record only the net deposit as sales without understanding the components.

A supplier was paid twice: retain both bank entries, confirm the supplier balance and document the recovery or credit. Do not delete evidence of an actual payment.

A cash purchase has no invoice: request a replacement from the supplier and flag the tax treatment for review. Never create a supplier invoice yourself.

The month changes after approval: document the late record and correction, then issue a clearly identified revised report if necessary. For assistance establishing this routine, enquire about monthly bookkeeping. Use management accounts when you also need regular interpretation of the figures.