Month-end close and bank reconciliation for a small business

Harbourline Coffee Roasters roasts beans, runs two cafés and sells online. Sales are about C$150,000 a month. The owner, Priya Nair, used to do the books herself on weekends. Last month her accountant found that the bank balance in the books was C$14,600 higher than the real bank statement and nobody could say why. Two supplier bills had been entered twice and card fees had never been recorded.

Priya has now hired a part-time bookkeeper and wants a proper month-end routine. She wants to know her real profit by the 8th working day of the next month, not three months later at year end.

You will create one month of synthetic books (about 180 transactions), a matching bank statement with realistic differences, and a set of opening balances. Then you will run the close the way a small accounting practice would: - a close checklist and calendar with owners; - a bank reconciliation that explains every difference; - accruals, prepayments and depreciation journals; - a reconciliation of each balance sheet account; - a trial balance, a simple P&L and balance sheet, and a one-page close note.

Done looks like a close pack that a reviewer can tick through, with an unreconciled difference of zero and a P&L Priya trusts. The method must work in any small business, so keep it general, but use the sales tax that applies where you live and say which one it is.