Why Every Contractor and Small Business Needs a Simple Monthly Close

Most business owners know they should stay on top of their numbers, but the monthly close is usually the first thing to fall through the cracks. Between managing jobs, crews, clients, and day-to-day work, financial review often gets pushed to “when I have time”… which usually means never.

But the monthly close doesn’t need to be scary or complicated. It’s simply a calm, consistent routine that keeps your books clean, your decisions clear, and your business steady.

Let’s break it down in a way that actually makes sense.

What Is a Monthly Close?

A monthly close is a checklist you complete at the end of each month to make sure your books are accurate and up to date. It helps you confirm:

• All income was recorded correctly

• All expenses are categorized

• Bank and credit card accounts are reconciled

• Job costs are updated

• Payroll is correct

• Reports match reality

Think of it as your financial reset button.

Why the Monthly Close Matters (Especially for Contractors)

Most financial problems don’t happen overnight. They show up slowly, in small ways:

• A job that is losing money

• A forgotten change order

• A supplier payment that slipped

• A miscategorized expense

• A surprise tax issue

• A cost code mistake

• A missing invoice

The monthly close catches these early — before they snowball.

For contractors, it also keeps job costing accurate so you can:

• bid smarter

• track progress

• protect your profit

• avoid cash flow surprises

• communicate clearly with GCs or clients

A clean monthly close makes you a stronger business owner.

The Most Common Monthly Close Mistakes I See

Here are the patterns that come up again and again:

1. Only reconciling when tax season comes

By then it’s too late — the problems have already grown.

2. Not separating job costs and overhead

This makes it impossible to see which jobs are profitable.

3. Letting receipts pile up

Missing documentation leads to errors and lost write-offs.

4. Not reviewing reports monthly

The P&L and balance sheet should guide your decisions, not collect dust.

5. Mixing business and personal activity

This creates chaos and messes up job cost accuracy.

These are simple to fix with a consistent routine.

A Simple, Calm Monthly Close Routine You Can Start Today

This is the same structure I use with clients — clear, steady, and easy to maintain.

1. Reconcile all bank and credit card accounts

Match the books to the statements.

2. Review job costs

Make sure labor, materials, subcontractors, and change orders are assigned correctly.

3. Categorize expenses

Clean up anything sitting in “uncategorized.”

4. Check your Accounts Receivable

Who owes you money? Anything overdue? Anything missing?

5. Check your Accounts Payable

Are there invoices you forgot to pay? Any early payment discounts? Any duplicate bills?

6. Review payroll

Confirm wages, classifications, and hours match your records.

7. Run financial reports

Look at your:

• Profit & Loss

• Balance Sheet

• Job profitability reports

You don’t need to analyze everything — just understand the key takeaways.

A steady monthly close is the difference between chaos and clarity.

How Contractors Benefit the Most

A consistent monthly close helps contractors:

• understand which jobs are profitable

• catch overruns early

• avoid missed billing

• keep AIA billing accurate

• prepare for tax season

• stay organized for audits

• stay compliant with payroll + wage rules

It protects your cash flow and your peace of mind.

You Don’t Have To Do This Alone

Most business owners feel overwhelmed by the monthly close because nobody ever showed them how to do it in a simple, structured way.

I help contractors and small businesses by:

• setting up monthly close routines

• reviewing the books every month

• organizing job cost reports

• cleaning up mistakes

• creating clear, easy workflows

• providing ongoing controller-level support

If you want your monthly close to feel calm and manageable — not stressful — message me anytime. I’m here to support you.

— Lena, LNH CPA PLLC