By Marianne Curphey Members Month-end accounting mistakes: common errors and how to avoid them 30 Sep 2026 We talked to three experienced accountants about how they keep their month-end processes accurate and timely. Developing good month-end habits is important in order to ensure that reporting is accurate. Your AAT training will prepare you well for carrying out regular month-end tasks, and teach you the steps you can take to improve processes and produce reliable financial information every month. Sometimes, however, errors creep into the process, because of time pressure or mistakes by other people. The potential issues include leaving reconciliations until the last minute, missing accruals and prepayments, posting journals without adequate review, failing to investigate unusual variances and overlooking accruals for payroll and employee costs. Here are some top tips on how to deal with this. What are the biggest mistakes accountants make during month-end close? Catia Franco FMAAT was head of finance at a property management company before leaving to start her own practice, CP Franco Accounts & Finance. She says that one of the biggest mistakes is treating month-end as an event rather than an ongoing process. “Reconciliations are often left until the last few days of the month, at which point the finance team is trying to reconcile bank accounts, clear suspense items, post accruals, review debtors and creditors and prepare management information all at once,” she explains. That creates unnecessary pressure and increases the likelihood of errors being carried forward. She says other common issues include: Bank and balance-sheet reconciliations not being completed regularly or reconciling items simply being rolled forward month after month without investigation. Accruals and prepayments being missed, particularly where information has not reached finance before the reporting deadline. Journals being posted without sufficient supporting documentation or independent review. Previous-month accruals not being reversed correctly, resulting in duplicated costs. Income or expenditure being posted to the wrong period or nominal code. Unusual variances being explained away rather than properly investigated. Payroll, pension, bonus, commission, holiday-pay and other employee-related liabilities being overlooked. Supplier invoices being posted after management accounts have already been prepared without considering whether an accrual should have been made. Balance-sheet accounts receiving far less scrutiny than the profit and loss account. “A month-end pack can look perfectly reasonable at first glance while significant problems are sitting behind the numbers,” she says. “The balance sheet is often where those issues become visible.” What should I check before completing month-end accounts? Rachael Chadwick-Harrison, managing Director at Chadwick accountants, says it is often mistakes by clients themselves which become apparent when reviewing their bookkeeping figures. “One of the biggest issues we see is the misuse of payroll journals and control accounts. Salaries, PAYE, National Insurance and pension contributions are often posted directly to the profit and loss account without properly clearing the relevant control accounts. This can duplicate costs and leave balance sheet figures that bear no relation to what is actually owed,” she says. “We also see a lot of what I would call “lazy bookkeeping”: transactions being posted to the easiest or most familiar nominal code without anyone stopping to consider what they actually are. A common example is putting almost everything through direct costs, even where the expenditure is clearly an overhead.” She says other frequent mistakes include assets being posted as expenses in the profit and loss account, vehicle loan repayments being treated entirely as motor expenses, and taxes being posted incorrectly, for example, VAT payments being allocated to corporation tax. “Accruals and prepayments are also regularly overlooked, particularly payroll and employee-related costs. This means the figures may look reasonable at first glance but do not accurately reflect the costs relating to that particular month.” Which month-end accounting errors cause the most problems? Andy Smith MAAT, AAT Licensed Member of the Year and owner of Abbeygate Accountancy, is a former group finance director with a wide range of experience in business and industry. He founded Abbeygate in 2013 and has worked in the automotive industry, media agencies, consultancy and construction. “For me, one of the biggest mistakes is people going straight to the Profit & Loss (P&L) and not really understanding their balance sheet,” he says. “If your balance sheet is right, you are a very long way towards knowing the P&L is right too. It might not all be in the perfect nominal code, but at least you know the numbers are there.” He says the most common issues he sees are missing journals for: Depreciation Stock adjustments WIP Payroll Dividends Corporation tax Accruals Prepayments “Corporation tax is a great example,” he says. “It is a real cost of making that profit, but it is often completely ignored in monthly management accounts. Another big one is not really reviewing the data in a way that is easy to read. I like information to be in a way so I can spot patterns, movements and variances quickly.” How can I improve processes and produce reliable financial information every month? Catia Franco says it is important to learn to understand the story behind the numbers. She says understanding double-entry bookkeeping remains incredibly important, even with increasingly automated accounting systems. If you understand what should be happening on both sides of a transaction, you are much more likely to identify when something has gone wrong. “I would also encourage trainees to develop good working-paper habits early in their careers. Someone else should be able to look at your reconciliation or journal and understand what you have done, what evidence you relied upon and how you reached the final figure.” How can accountants speed up month-end reporting without sacrificing accuracy? Andy Smith says it is important to have a proper month-end process and carry out tasks in the right order: bank first, balance sheet next and then P&L after that. Then review the accounts in a format that is really easy to read. “Look for things that have moved and look for patterns,” he says. “Does payroll look right? Have margins changed? Is a cost missing? Technology helps massively now too. We use it to pick up duplicate transactions, coding issues, VAT issues and other oddities. “Remember the most effective accountants are the ones that can turn the data into something useful, spot risks and opportunities and then communicate and explain it clearly to the leadership team running the business.” How do accountants prevent month-end reporting mistakes? Rachael Chadwick-Harrison says the key is to have a consistent month-end process rather than treating it as a last-minute exercise. Bank accounts, credit cards, payroll, VAT, loans and other control accounts should be reconciled every month, with supporting documentation retained for any journals posted. “I would also always recommend completing a month-on-month comparison. Look at each material movement and ask, “Can I explain why this figure has changed?” If the answer is no, it probably needs investigating.” What controls help reduce month-end accounting errors – advice for students “Do not just focus on whether the accounts balance. Balanced accounts can still be completely wrong,” says Rachael Chadwick-Harrison. She added: “Take the time to understand the transaction and what the numbers are telling you. Think about whether an item belongs on the profit and loss account or the balance sheet, whether it relates to this month or another period, and whether the treatment makes commercial sense.” Further reading AML and compliance mistakes to avoid Excel tips: Avoid mistakes with protect sheet Practice assessments: the key to an excellent grade Marianne Curphey is an award-winning financial writer and columnist, and author of the book How Money Works. She worked as City Editor at The Guardian, deputy editor of Guardian online, and has worked for The Times, Telegraph and BBC.