A management accounts checklist: twenty checks in four stages

1. Bank accounts reconciled to the month-end statements, with no unexplained items.
2. Sales and purchase ledgers reconciled to their control accounts.
3. Accruals and prepayments posted for material items: rent, insurance, utilities, subscriptions, professional fees.
4. Payroll journal posted, including employer taxes and pension or superannuation.
5. Depreciation posted for the month.
6. The sales tax control account agrees to the return or its working.
7. Suspense account cleared, or every balance in it explained.
8. The trial balance balances, and it is for the right period: this month, plus the year to date.

1. Every ledger is on a report line, including any opened this month. A new ledger is the most common reason a figure goes missing.
2. The balance sheet balances in the report, not just in the system.
3. Profit for the period ties to the movement in retained earnings, after any dividends.
4. The comparatives are right: last month, the same month last year and budget, from the same chart of accounts.
5. The year to date follows the company's financial year, not the calendar year by default.

1. Gross margin is within its normal range. If it moved more than a couple of points, find out why before writing anything.
2. Overheads checked line by line against last month, for double postings and missing accruals.
3. Debtor and creditor days are reasonable for the payment terms.
4. Cash in the report agrees to the bank reconciliation.

1. Commentary gives the number, the comparison and the reason for each section, and ends with what deserves attention.
2. Every figure in the commentary matches the tables. Check them one by one.
3. Same layout as last month, the right client's name and logo, and the right period on every page.

Osprey Logistics' management accounts showed gross margin jumping from 24.1% to 29.6% in a single month, with nothing changed in the business.

Check 9 found it: a new ledger, "Fuel cards – new provider", opened mid-month, had not been placed in cost of sales. £18,300 of fuel sat outside the report. Placed where it belonged, gross margin was 24.3%, in line with the trend. Without the checklist, the commentary would have celebrated an improvement that didn't exist.

If there are only five minutes, run these:

• Check 9, every ledger placed. New ledgers are the most common cause of missing or misplaced figures.
• Check 11, profit ties to reserves. It catches journals posted to the wrong period and misplaced balance sheet ledgers.
• Check 19, commentary matches the tables. Figures in commentary are often typed from an earlier draft, and a client who spots a mismatch stops trusting the whole pack.

Make the checklist part of the file, ticked and initialled each month; have a second person do stages three and four where you can; and add a check every time something slips through, so the list grows from your own mistakes. For service businesses, add a check that work in progress and accrued income are posted; for product businesses, a stock movement check; for clients with a budget, that it is the latest approved version, phased by month; for groups, run it per company and add an intercompany check.

Stages one, three and four are judgement. Stage two is mostly mechanical, and it is where the hours go every month: re-placing ledgers, fixing links, rebuilding the same report.

Magic MIS takes stage two. Upload the trial balance, and each ledger is placed on a report line once; next month only new ledgers are placed. The report is checked before it is delivered, the balance sheet must balance, and every figure opens to the ledgers it came from. The AI drafts the commentary's words and never writes a figure. Stages one, three and four stay yours; there is a fuller stage one in the month-end close checklist.