What is the monthly close process?
The monthly close (or month-end close) is the process of finalising all financial transactions for the month, reconciling accounts, posting adjusting entries, and producing management accounts. For UAE businesses, the monthly close must also account for VAT reconciliation (ensuring the accounting records match what's reported to the FTA), multi-currency revaluation (AED is pegged to USD, but other currencies fluctuate), and WPS payroll verification. A well-structured monthly close should take 5–7 working days after month-end. Most UAE SMEs take 15–20 days because they lack a defined process and rely on a single person who holds everything in their head. TruAccountants delivers a 7-day monthly close as standard on the Scale tier (AED 8,000/month), with management accounts issued by the 7th working day of the following month. The Growth tier (AED 3,500/month) targets a 10-day close.
The 7-day monthly close checklist
Day 1: Cut-off and transaction capture
- Set the accounting period cut-off — no more transactions backdated into the closed month after this point
- Ensure all sales invoices for the month have been raised and recorded
- Ensure all purchase invoices received have been entered
- Record all petty cash transactions and replenish the float
- Process employee expense claims for the month
- Record all credit card transactions
Day 2: Bank reconciliation
- Download bank statements for all accounts (AED, USD, and any other currency accounts)
- Reconcile each bank account to the general ledger balance
- Investigate and clear all reconciling items older than 30 days
- Record any bank charges, interest, and direct debits not yet captured
- Reconcile the petty cash count to the petty cash ledger balance
Day 3: Receivables and payables
- Run the accounts receivable ageing report — review all balances over 60 days
- Follow up on overdue invoices and document collection actions taken
- Run the accounts payable ageing report — identify any invoices due for payment
- Reconcile supplier statements to AP ledger balances for top 10 suppliers
- Record any credit notes issued or received during the month
- Review and update the expected credit loss (ECL) provision if material changes occurred
Day 4: Payroll and accruals
- Verify WPS payroll was processed and matches the payroll register
- Reconcile WPS bank transfers to payroll records
- Post salary accrual if payroll straddles month-end
- Update the leave accrual based on current leave balances
- Update the end-of-service gratuity provision (monthly accrual per employee)
- Post accruals for known expenses where the invoice hasn't arrived (rent, utilities, professional fees)
- Reverse prior-month accruals that have been invoiced
Day 5: Prepayments, depreciation, and adjustments
- Amortise prepaid expenses (insurance, rent, licences) for the month
- Post monthly depreciation on fixed assets
- Post IFRS 16 lease depreciation and interest on right-of-use assets
- Revalue foreign currency balances (receivables, payables, bank balances) at month-end rates
- Post any revenue recognition adjustments (IFRS 15 — percentage of completion, deferred revenue release)
- Review and post any manual journal entries with supporting documentation
Day 6: Intercompany and VAT
- Reconcile intercompany balances with all group entities — both sides must agree
- Record intercompany invoices and eliminate any timing differences
- Reconcile VAT output tax per the ledger to sales records
- Reconcile VAT input tax per the ledger to purchase records
- Verify VAT control account balance matches the expected VAT return position
- For QFZP entities: verify qualifying vs non-qualifying income split is correctly recorded
Day 7: Review and reporting
- Run the trial balance and scan for unusual balances or signs
- Compare P&L to prior month and to budget — investigate variances over 10%
- Review balance sheet for reasonableness — no negative asset balances, no unexplained movements
- Generate management accounts: income statement, balance sheet, cash flow statement
- Prepare variance commentary for significant line items
- Lock the accounting period to prevent backdated entries
- Distribute management accounts to stakeholders
Common monthly close problems in UAE businesses
- No cut-off discipline. Transactions keep being entered into closed months. Solution: lock the period in your accounting software on Day 2 and require approval for any backdated entries.
- Bank reconciliation takes 3 days instead of 1. Usually because transactions aren't recorded in real time. Solution: connect bank feeds and reconcile weekly, not just at month-end.
- Intercompany balances never agree. One side records a transaction, the other doesn't. Solution: use a shared intercompany log updated in real time, and reconcile monthly, not at year-end.
- VAT records don't match the ledger. Input tax claimed on the VAT return differs from what the ledger shows. Solution: reconcile VAT to the ledger before filing every return, not after.
- No management accounts produced. The close finishes but nobody sees the numbers. Solution: management accounts are the output, not an optional extra. If you close the books but don't produce the P&L, the close served no purpose.
The 7-day close is achievable for any UAE SME. The bottleneck is almost never complexity — it's missing source documents (invoices not received), unreconciled bank items from prior months, and a lack of a written close calendar with assigned owners for each step.
Month-end close directly affects your tax position. If your books are perpetually 2–3 months behind, you can't file VAT returns on time (AED 1,000 penalty per late filing), you can't monitor QFZP eligibility, and your year-end audit takes twice as long because the auditor is cleaning up 12 months of unreconciled data.
What TruAccountants does here
- Run the complete monthly close process within 7 working days (Scale tier) or 10 days (Growth tier)
- Deliver management accounts (P&L, balance sheet, cash flow) by the 7th or 10th working day
- Reconcile all bank accounts, intercompany balances, and VAT control accounts monthly
- Maintain the close calendar with task owners and deadlines for each step
- Provide variance commentary on significant P&L movements
- Lock accounting periods after close to prevent unauthorised backdating
Still closing the books on the 25th?
Tell us what's slowing you down. We'll build a close calendar and get your management accounts out by day 7 — every month.
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