The month-end close process is the most common and frequent accounting process our clients will undergo. It allows accountants to verify that all financial activity is; complete and accurately recorded (a theme you will see repeated many times throughout this document), correctly categorized, reconciled and any discrepancies identified are resolved. It is a crucial step in the accounting process to ensure the reliability and integrity of the financial data is maintained. Let's take a look at the steps generally involved in this process for accountants.

For enterprises and customers with the Audit readiness module, we have made this process more streamlined than ever. Our customers can go through the straightforward checks within the Controls and Risk Management module and follow these high-level steps.

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Table of content

Step 1 Data completeness - All my sources are in Cryptio

Step 2 Data accuracy - All my sources are correct

Step 3 CoA accuracy - All my transactions are categorized and labels correct

Step 4 Generating reports

Step 5 Period locking and impairment

Step 6 Syncing to ERP

Step 7 Compare ERP data with Cryptio data

Step 8 Save documentation

 

Step 1 Data completeness

a) Complete the Inventory module test to ensure all relevant sources are imported.

• Check out the Inventory module article for step-by-step guidance.
• In this step, every company should ensure on a monthly basis that all wallets, exchange accounts, and custody accounts are fully imported into their Cryptio workspace. This is crucial as missing sources will result in an incomplete reconciliation and unreliable data as a result.
• Generate and review the Source List report to make sure there are no asset changes between the two periods.

💡 The best practice policy is to keep an internal list of all sources of income used by the company as well as the date they were added. Using the date as a reference point, this should be checked against their Cryptio workspace to ensure completeness each month.

 

b) Complete the Related Parties module test to make sure all internal transfer contacts are updated, including vendor contacts.

• On how to use the module, check out the Related Parties module article.

💡 We recommend keeping an internal list of all controlled source addresses as a policy. This documentation will be referred to on a monthly basis against Cryptio’s list for potential new additions.

 

Step 2 Data Accuracy

a) Navigate to the Sanity check tests (Balances, Prices, and Cost basis or Data Integrity module) and update all transactions that have missing prices and/or missing volumes.

• For step-by-step guidance, discover our article on Balances sanity check, Prices sanity check, and Cost basis sanity check.

💡 One recommendation to reduce the stress of completing this at month's end is to perform this task on a weekly basis. As transactions occur throughout the period, companies will have the ability to reconcile missing volumes and prices on any given day.

 

Step 3 CoA accuracy

a) Review and verify transaction categorization and labels.

• Make sure all transactions for the current month are all labeled and labeled correctly.
• Simply navigate to the Transactions page > Needs review and find the Transactions without label tab. Then you can see all the transactions that have no labels associated with them.

b) Navigate to the Reconciliation module test to make sure the chart of accounts is mapped correctly

• Ensure that the ‘Incomplete CoA mapping’ table is as minimal as possible.
• On navigating the Reconciliation module, check out our article here.

💡 The best practice policy here is to keep the starting numbers for each account type the same.

1. Assets: 10000 - 19999
2. Liabilities: 20000 - 29999
3. Equity: 30000 - 39999
4. Revenue: 40000 - 49999
5. Expenses: 50000 - 59999

This will give your accounting data a cohesive structure as you expand operations further and grow your business over time. Each account should be uniquely numbered as well.

 

Step 4 Generating the End-of-month reconciliation report

• Our End of monthly reconciliation report encompasses all the relevant reports you need in one click: Ledger entries, asset roll forward, trial balance, and transaction history report.
• For tips and tricks, check out our article here.

💡 Examples to look out for:

• Asset roll forward from period to period matches with all the transactions in that period.
• Ledger entries align with transactions that you want to sync into ERP. 

Step 5 Period locking and impairment [If applicable]

• Lock your period using our data lock functionality under the Controls and Risk module or follow the steps in the Locking Data article.
• Navigate to the Impairment module and get all the updated balances and generate an impairment balance report.
• For detailed impairment module guidance check out the resource here.

Step 6 Syncing to ERP

• Prepare journal entries - Create journal entries that summarize all reconciled activity within the period, including adjustment entries if necessary in the general ledger. This will be synced directly to the client’s ERP software.
• For ERP-specific syncing, scroll to the bottom of the User Guide and select the relevant software for you.
• Navigate to the Transactions page > Needs review and find the Ready to be synced tab. Then you can see all the transactions that are ready to be pushed as journal entries.

💡 For non-ERP users, generate the Ledger entries report.

 

Step 7 Compare ERP data with Cryptio data

• Reconcile sub-ledgers and trial balance - Ensure that sub-ledgers and trial balance are in agreement by comparing account balances.

💡 Users can use the trial balance from the End-of-month reconciliation report to complete the comparison.

 

Step 8 Save documentation

• Prepare financial reports for management review - Generate financial reports, such as trial balance income statement, and cash flow statement, to provide insights into the company's financial performance.

This concludes the monthly process to ensure data completeness during your reconciliation. Again to note, this should always be completed prior to reviewing data accuracy. An accurate but incomplete data set is still unreliable and can lead to significant financial harm over an extended period of time.