“Walk us through your month-end close”

“Walk us through your month-end close” is the finance panel's favourite question, because a person who has really done it answers in order, with dates, and a person who has not answers in adjectives. Bank reconciliation is asked on its own too, and the Excel test is often the same task. Prepare one answer that covers both.

1. 1Cut-off. By the 2nd or 3rd working day, every invoice, receipt, payroll and mobile money transaction of the month is posted, and nothing from the new month is.
2. 2Reconcile cash and bank. Count petty cash with a witness and sign the count sheet. For each bank and mobile money account, match the ledger to the statement line by line: the difference must be explained by timing items (uncleared cheques, deposits in transit) and bank charges, nothing else.
3. 3Clear the balance sheet. Staff advances older than 30 days chased, prepayments and accruals posted, payables agreed to supplier statements.
4. 4Review. Look at every line more than 10 per cent over or under budget and write one sentence for each before anyone asks.
5. 5Report and get it reviewed. Trial balance, budget-versus-actual by project, and the reconciliations go to the finance manager by a fixed date, the 7th in most NGOs, and she signs them.

When the bank reconciliation does not balance, the panel wants to hear a method, not panic. First the common causes: a bank charge not posted, a transposed figure (a difference divisible by 9 often means swapped digits), a transfer posted twice, a deposit recorded in the wrong month. Then line-by-line matching against the statement and the vouchers. Then, if it still does not balance, you report the unexplained difference to your supervisor with the work you did. You never add a figure to make it balance, and you never park it in suspense and move on.