F: Closing the Month

By the end of September, J-101 is three months in. August and September repeated the work of Exercises C and D (bills, payments, pay applications 2 and 3 and Lakeview's September payment; see the season so far). Before anyone relies on the September figures, the controller closes the month:

1. forecasts the job's final cost;
2. prepares and posts the WIP schedule, which adjusts revenue to the percentage of completion;
3. imports the bank statement and reviews each line;
4. reconciles the bank account to the statement;
5. reads the quarter's Profit and Loss and Balance Sheet;
6. closes the books through September 30.

Before You Begin

• Exercise E is done, and the August and September transactions below are entered.
• Approving a forecast or a WIP schedule, posting WIP entries and closing the books need a Company Admin or Accountant.

The Season So Far

Month	Vendor Bills	Paid to Vendors	Billed to Lakeview	Received from Lakeview
July	100,000.00		136,000.00 (application 1)
August	117,000.00	62,500.00 (August 10)	144,000.00 (application 2)	100,000.00 (August 25)
September	98,000.00	137,600.00 (September 10)	146,000.00 (application 3)	152,000.00 (September 20)
To September 30	315,000.00	200,100.00	426,000.00	252,000.00

Step 1: Forecast the Final Cost

A forecast asks, line by line, what the job will cost when it is finished. The September walk-through finds one problem: the drywall crew will have to patch around the electrical rough-in, which Summit Drywall prices at $4,500.00 more than its subcontract.

1. Go to Jobs & Costing → Forecasts & WIP and click New Forecast.
2. Choose Job J-101, enter Cutoff 09/30/2026 and a Note, and click Create Forecast.
3. The forecast lists each budget line with its Revised Budget, Actual Cost and Open Commitments. For each line, enter what is still to come:
   • Still to Buy: cost not yet committed. On 01-100 General Conditions, enter 6000.00 for October's site services, which have no commitment.
   • Adjustment: a cost change you know about but have not committed. On 09-100 Drywall, enter 4500.00 with the Note Patching after electrical rough-in.
4. Click Save Draft.

Figure 9-45 The September forecast lines, scrolled to show the entry columns.

1. Still to Buy: cost to come that is not in an open commitment.
2. Adjustment: a known change in cost, here the drywall patching.
3. Note: why the line changed.

Each line's Forecast Final Cost is Actual Cost + Open Commitments + Still to Buy + Adjustment. For drywall: 72,000.00 + 33,000.00 + 0.00 + 4,500.00 = 109,500.00. The Forecast card adds the lines up:

Figure 9-46 The forecast's effect on the job's profit.

The job is now expected to cost $391,500.00 and earn $516,000.00 − $391,500.00 = $124,500.00, a margin of 24.1% instead of the planned 25.0%.

5. Click Approve and confirm. The approved forecast is the one the WIP schedule uses.

See Forecasts.

Step 2: Prepare and Post the WIP Schedule

Lakeview has been billed $426,000.00, but by the percentage-of-completion method the company has earned only part of that. The WIP schedule works out the difference.

1. On Forecasts & WIP, open the WIP Schedule tab and click New WIP Schedule. Enter Cutoff 09/30/2026 and click Create WIP Schedule.

Figure 9-47 The draft WIP schedule for September 30.

1. Billings in Excess of Costs: billed more than earned, a liability.
2. Refresh Figures recalculates the draft after later postings.
3. Approve freezes the schedule.

WIP Figure	Calculation	Amount
Percent Complete	Cost to Date 315,000.00 ÷ Forecast Final Cost 391,500.00	80.5%
Earned Revenue	516,000.00 × 315,000.00 ÷ 391,500.00	415,172.41
Billed to Date	applications 1 to 3	426,000.00
Billings in Excess of Costs	426,000.00 − 415,172.41	10,827.59

2. Click Approve and confirm.
3. Click Post WIP Entries. Structally shows the entry it will post, with the balance each WIP account should have (Target Balance) and the balance it has now (Recorded Balance).

Figure 9-48 The WIP entry before it is posted.

4. Click Post Entries.

The WIP Entry (September 30)

Account	Debit	Credit
4100 WIP Revenue Adjustment	10,827.59
2400 Billings in Excess of Costs (J-101)		10,827.59

Revenue for the quarter becomes $426,000.00 − $10,827.59 = $415,172.41, the amount earned. The $10,827.59 is a liability: work Lakeview has paid for or been billed for but that is not yet done. Next month's schedule replaces this balance with a new one.

See WIP Schedules.

Step 3: Import and Review the Bank Statement

The bank's September statement for Operating Checking arrives as a CSV file with ten lines from August 12 to September 30. Its first lines:

date,description,amount,external_id
2026-08-12,CHECK 1001,-16000.00,FVB-0812-001
2026-08-12,CHECK 1002,-6000.00,FVB-0812-002
2026-08-13,CHECK 1003,-40500.00,FVB-0813-001
2026-08-26,DEPOSIT,100000.00,FVB-0826-001

1. Go to Banking → Bank Feed and click Import Statement on the 1010 Operating Checking card.
2. Choose the file in Statement CSV and click Import CSV. The file uses the standard columns, so it imports directly.

Figure 9-49 Importing the September statement.

1. Statement CSV: the file from the bank.
2. Import CSV imports every line for review.

The account's Bank Transactions page now lists the ten lines For Review. Nine show 1 Possible Match: a payment, check or deposit already in the books with the same amount. The monthly service charge shows Needs Category.

Figure 9-50 The imported lines waiting for review.

3. Click Review Line on CHECK 1001. Structally proposes PAY-2026-000001, the August 10 payment to Pine Valley Lumber. Click Confirm Match. Matching links the line to the existing payment; nothing new is posted.

Figure 9-51 Matching a check to the payment already recorded.

1. The proposed record: same amount, dated two days before the bank cleared it.
2. Confirm Match links the two.

4. Match the other eight lines the same way.
5. Open the MONTHLY SERVICE CHARGE line. Nothing in the books matches it, so it is new: under Bank Entry, choose Account 6020 - Bank Fees and click Categorize as Bank Entry.

Figure 9-52 Recording the bank's fee from the statement line.

1. Account: where the fee is charged.
2. Categorize as Bank Entry posts the entry.

The Bank Fee (BE-2026-000001)

Account	Debit	Credit
6020 Bank Fees	25.00
1010 Operating Checking		25.00

All ten lines are now reviewed: nine Matched and one Categorized. See Importing Bank Statements and Reviewing the Bank Feed.

Step 4: Reconcile the Bank Account

1. On the Bank Transactions page, click Reconcile.
2. Choose Imported Bank Statement, and enter Statement Date 09/30/2026, Opening Balance 250000.00 (the balance on July 1, when the books started) and the statement's Ending Balance 307875.00. Click Start Reconciliation.

Figure 9-53 Starting the September reconciliation.

1. Imported Bank Statement: reconcile the lines you reviewed in the feed.
2. Statement Date: the last day of the statement.
3. Ending Balance: the closing balance printed on the statement.
4. Start Reconciliation opens the statement.

3. Click Select All under Ready to Clear, then Clear. The ten reviewed lines move to Cleared Lines, and the Difference becomes 0.00: 250,000.00 + 57,875.00 cleared = 307,875.00.

Figure 9-54 Every line cleared and the difference at zero.

4. Click Complete and confirm. The statement is Completed.

Figure 9-55 The completed September reconciliation.

Why the Books Show Less Than the Bank

On September 30 the books show $301,875.00 in Operating Checking, $6,000.00 less than the bank. The difference is check 1008 (PAY-2026-000008) to Cascade Site Services, written on September 10 but not yet cashed. It stays uncleared until it appears on October's statement. An outstanding check is normal; an unexplained difference is not.

See Reconciling an Account.

Step 5: Read the Quarter's Reports

Go to Reports and run the Profit and Loss from 07/01/2026 to 09/30/2026, and the Balance Sheet as of 09/30/2026.

Figure 9-56 The quarter's Profit and Loss.

Profit and Loss Line	Amount
4010 Contract Revenue (applications 1 to 3)	426,000.00
4100 WIP Revenue Adjustment	−10,827.59
Total Income	415,172.41
5030 Subcontractors	249,000.00
5040 Materials	48,000.00
5090 Other Job Costs	18,000.00
Gross Profit	100,172.41
6020 Bank Fees	25.00
Net Income	100,147.41

Gross profit is 100,172.41 ÷ 415,172.41 = 24.1% of revenue, the margin the forecast expects for the whole job. That is the point of the WIP adjustment: revenue follows cost, so each period shows the job's expected margin.

Figure 9-57 The Balance Sheet at the end of the quarter.

Balance	Why
1100 Accounts Receivable 131,400.00	Invoice 3, billed September 30
1110 Retainage Receivable 42,600.00	10% held on applications 1 to 3
2010 Accounts Payable 90,000.00	September's bills, less retainage, paid in October
2020 Retainage Payable 24,900.00	10% held on the subcontractors' bills
2400 Billings in Excess of Costs 10,827.59	The WIP entry of Step 2

See Profit and Loss and Balance Sheet.

Step 6: Close the Books

With the month reviewed, protect it from later changes:

1. Go to Settings → Books Closed. The Closed Through card shows Jun 30, 2026, the date set in Exercise A.
2. Click Change Date, enter Lock Date 09/30/2026 and click Save.

Figure 9-58 The books closed through September 30, 2026.

1. The last closed day.
2. Change Date opens the Lock Date editor again at the next month-end.
3. Reopen clears the date after you confirm in the Reopen Closed Books dialog.

From now on, nothing can be posted, voided or reversed with a date on or before September 30, 2026. A mistake found later is corrected in October, as Exercise G shows. See Books Closed.

Check Your Work

Check	Where	Expected
Forecast	Forecasts & WIP	J-101 Forecast 1, cutoff 2026-09-30, Approved, 391,500.00
WIP	WIP Schedule tab	2026-09-30 Version 1, Posted
Bank	1010 Bank Transactions	Matched (9), Categorized (1)
Reconciliation	Banking → Reconciliation	Statement 2026-09-30 Completed, difference 0.00
Books	Settings → Books Closed	Sep 30, 2026
Net income	Profit and Loss 07/01 to 09/30/2026	100,147.41

Next: G: Correcting Mistakes.