How to close the month in AP: bills, accruals, unapproved items

Short answer

1. Clear the approval queue.
2. Enter late bills and accrue what has no bill.
3. Match supplier statements.
4. Check the payables total, then lock the month.

Before you start

Pick a cut-off day each month, such as the third working day. Tell the team that bills dated in the month must be in by then.

The month-end close checklist generator gives you a printable list.

The manual way in Xero and MYOB

1. Clear unapproved bills. In Xero go to Business > Bills to pay and open the Awaiting approval tab. Approve what is correct. Reject or ask about the rest. Bills left in draft are not in your payables.
2. Enter late bills. Enter any bill for the month that arrived after cut-off. Use the date on the bill, not today.
3. Accrue. Think about goods delivered and work done in the month with no bill yet. Post a manual journal dated the last day of the month and set it to reverse on the first day of next month. In Xero the path is Accounting > Manual journals.
4. Match supplier statements. Pull statements from your main suppliers. Compare each to your bills. Look for missing invoices, duplicates and unapplied credits.
5. Check the total. Run the aged payables report at the month-end date. The total should equal Accounts Payable on the balance sheet. See how to read an aged payables report in Xero.
6. Lock the period. Set the lock date in Xero financial settings so past months cannot be changed.

Limits: Xero does not match supplier statements for you. Accruals are manual and easy to forget to reverse.

The Pulsify way

1. Forward invoices to your Pulsify address as they arrive. Late bills are read and queued straight away.
2. Open the Approvals queue to see what is still waiting. Use bulk approve for the clean ones and reject the rest with a reason.
3. Forward supplier statements. Pulsify matches them line by line and shows invoices the supplier lists that you do not have.
4. Approve the bills. Each is created in Xero or MYOB.

Pulsify will not submit a bill dated inside your Xero lock date. Get the bills approved before you lock the month.

Worked example

It is 31 October. Example Plumbing Supplies has delivered $4,400 of pipe on 29 October. The invoice has not arrived.

You post an accrual of $4,000 ex GST, dated 31 October, set to reverse on 1 November. You leave GST out because there is no tax invoice yet. When the bill arrives on 5 November you enter it with its date. The reversal cancels the accrual so the cost counts once.

Common mistakes

• Locking before the queue is clear. Approved bills dated in the locked month then cannot be created.
• Forgetting to reverse accruals. The cost counts twice.
• Accruing GST. A GST credit needs a tax invoice. Claim it when the bill arrives. See the ATO on GST credits.

Next step

Book a call to find out how customers have saved hours per week after switching. See the approval workflows guide and the supplier statements guide.