1Pre-Close Preparation
0/5- Confirm all new contracts signed this month are entered in the contract register
- Verify any contract amendments, renewals, or cancellations are recorded
- Ensure all invoices for the period have been issued and posted
- Reconcile billing system totals to the general ledger
- Confirm cash receipts are applied to the correct customer accounts
2Revenue Recognition
0/5- Calculate monthly recognised revenue for each active contract (straight-line or usage-based)
- Verify recognition start and end dates align with contract terms
- Process revenue for any contracts starting or ending mid-month (pro-rata if applicable)
- Handle one-time fees: confirm whether they are distinct obligations or spread across the term
- Post revenue recognition journal entries (Dr Deferred Revenue, Cr Revenue)
3Deferred Revenue Reconciliation
0/6- Calculate opening deferred revenue balance (prior month closing balance)
- Add new billings and cash received in advance
- Subtract revenue recognised this month
- Verify closing deferred revenue balance matches the expected schedule
- Reconcile deferred revenue sub-ledger to general ledger control account
- Investigate and resolve any variances greater than your materiality threshold
4Waterfall & Reporting
0/5- Update the deferred revenue waterfall schedule
- Verify waterfall totals reconcile: opening + additions - recognised = closing
- Review deferred revenue ageing: flag any contracts with balances beyond their end date
- Prepare month-over-month variance analysis for recognised revenue
- Update ARR/MRR calculations if tracked separately
5Compliance & Documentation
0/5- Review any new multi-element arrangements for proper allocation (ASC 606 Step 4)
- Confirm variable consideration estimates are updated (usage overages, discounts, credits)
- Document any significant judgements or estimates made this period
- File supporting schedules: recognition schedule, waterfall, reconciliation
- Obtain sign-off from revenue accountant and finance manager
6Post-Close Review
0/5- Run analytical review: compare recognised revenue to budget and prior periods
- Verify revenue by product line, geography, or segment (if applicable)
- Check for any revenue reversals or credit notes that need processing
- Update the close calendar with actual completion dates
- Note any process improvements for next month