Matrixx0070 Month-End Prep
When to use
Use this at month-end to close the books with confidence. It guides you through reconciling recorded revenue against what payment processors actually deposited, flags mismatches, and assembles a packet for the owner or accountant.
Not for: tax estimates or the accountant handoff (use smb-tax-season-organizer); forward cash forecasting (use smb-month-heads-up); making unapproved edits to financial records — every adjustment needs owner sign-off.
Method
- Gather sources. The month's bookkeeping records plus payout reports from each processor (card, online, marketplace).
- Reconcile. Match recorded income against processor deposits by date and amount. Surface unmatched transactions, unbooked fees, refunds, and chargebacks.
- Rank discrepancies. For each mismatch: likely cause and dollar amount, sorted largest first. Decision point: never silently adjust — a large unexplained gap is a stop-and-ask, not an auto-fix.
- Check common gaps. Uncategorized expenses, missing receipts, duplicate entries, outstanding invoices.
- Propose corrections. Present findings and suggested adjustments. Apply only owner-approved changes.
- Export the packet. Reconciliation summary, flagged items, and a corrections log. State where it was saved. Books are the owner's to sign off.
Example
March recorded card revenue $24,000; Stripe deposited $22,910. Reconcile: gross $24,000 minus $690 processor fees (not booked) minus two refunds ($400) = $22,910 — matches, so the "gap" is just unbooked fees. Flag: fees $690, action "book as expense." Separately, a $180 charge appears twice — duplicate entry, remove one. Gaps: 3 expenses uncategorized, 1 receipt missing. Packet exported; owner approves the two adjustments before they're applied.
Pitfalls
- Treating processor fees or refunds as "missing money" instead of expected deductions from gross.
- Silently adjusting entries to force a match — that hides the real error and breaks the audit trail.
- Reconciling only the biggest account and skipping the marketplace payouts where small fees pile up.
- Exporting the packet before the owner has approved corrections, so the numbers ship half-baked.
Output format
- Reconciliation summary: recorded vs deposited | net difference.
- Discrepancy list (ranked): item | amount | likely cause | suggested action.
- Gaps checklist: uncategorized | missing receipts | duplicates | outstanding invoices.
- "Approve the adjustments to apply" gate.
- Exported packet: reconciliation + flagged items + corrections log, with save location.
Reference
Month-end close checklist (work top to bottom)
- Cash / bank reconciliation — match every bank line to a booked entry; resolve outstanding checks and deposits in transit.
- Processor payout reconciliation — Stripe/Square/PayPal/marketplace: gross sales − fees − refunds − chargebacks − holds/reserves = net deposit. Do each processor separately.
- Accounts receivable — confirm open invoices, apply received payments, age the balance.
- Accounts payable — record all bills received; accrue known unbilled expenses.
- Expense categorization — clear the uncategorized bucket; attach missing receipts.
- Payroll — wages, taxes, and benefits recorded for the period.
- Inventory (if applicable) — adjust to counts; book COGS.
- Sales tax — reconcile collected vs liability.
- Duplicates & anomalies — scan for double entries and out-of-range amounts.
- Review & export packet — summary, flagged items, corrections log; owner/accountant sign-off.
The processor reconciliation formula
The single most common "missing money" confusion is treating fees and refunds as a gap. They aren't:
Net deposit = Gross sales − Processor fees − Refunds − Chargebacks − Reserves/holds + Reserve releases
Worked example: recorded card revenue $24,000; Stripe deposited $22,910. $24,000 − $690 fees − $400 refunds = $22,910 → matches; the "gap" is just unbooked fees. Action: book $690 as a processing-expense, book the $400 refunds against revenue. A residual that doesn't resolve to fees/refunds/timing is a real discrepancy — stop and investigate.
Discrepancy triage (rank largest first, never silently adjust)
| Type | Likely cause | Standard action |
|---|---|---|
| Unbooked processor fees | Fees netted at payout, not recorded | Book as expense |
| Refund/chargeback not recorded | Post-sale reversal | Book against revenue; note chargeback |
| Timing difference | Sale in month, deposit next month | Record as deposit-in-transit; carry forward |
| Duplicate entry | Same charge booked twice | Remove one; check for a pattern |
| Missing deposit | Payout in reserve/hold, or unrecorded | Trace to processor statement before adjusting |
| Uncategorized expense | Not yet coded | Categorize; request receipt if missing |
| Unexplained large gap | Unknown | Stop-and-ask — owner decision, do not force a match |
Discrepancy tolerance
Set a materiality threshold (e.g. amounts under $5-10 or a small % of the account may be booked as a rounding/misc adjustment with a note). Anything above the threshold, or any unexplained gap regardless of size, is escalated to the owner — never plugged. Forcing a match hides the real error and destroys the audit trail.
Documents to have on hand
Bank statements (all accounts), each processor's monthly payout/fees report, credit-card statements, loan statements, payroll reports, the general ledger / bookkeeping export, open-invoice (AR) and open-bill (AP) lists, and prior-month closing balances to roll forward.
Cadence and controls
Close within ~5-10 business days of month-end while transactions are fresh. Keep a corrections log (what changed, from → to, why, approved by) so the close is auditable. Reconcile every account including small marketplace payouts where fees quietly accumulate. Export the packet only after the owner has approved the adjustments — the books are the owner's to sign off, and no entry is finalized without that approval.