5 Month-End Close Mistakes That Cost Finance Teams (and How to Avoid Them)
Real-world scenarios of common month-end close errors: forgotten prepayments, miscalculated accruals, timing mismatches, and how structured processes prevent them.
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Month-End Close8 min read27 April 2026
P&L Flux Analysis: How to Investigate Month-Over-Month Variances
Guide to understanding material P&L variances, investigating root causes, and documenting explanations for controller and CFO review.
You close the books and pull the P&L. March revenue is down 15% vs February. OpEx is up 8%. What happened? If you cannot quickly explain these variances, your close is incomplete. CFOs want to see not just the numbers, but the story behind them.
The Variance Investigation Process
1. Identify Material Variances
Compare this month to prior month and year-to-date. Flag line items that moved more than 10% or more than £X (your materiality threshold). These are the ones you investigate.
2. Drill Into the Detail
Do not stop at the top-line variance. If revenue is down £50K, which products or customers drove that? If OpEx is up, which department? Drill down to the GL account level.
3. Link to Business Events
Is the variance due to a timing issue (e.g., a large invoice posted a few days later this month)? A new business development (new customer, new product)? A price change? A one-time event (bonus payout, equipment purchase)? Connect the variance to a business event so the reader understands it.
4. Document the Explanation
Create a variance schedule in Excel or a simple table. For each material variance, note: What is it? Why did it happen? Is it expected to repeat? Include the GL account, the amount, the explanation, and the supporting evidence.
Example: "Revenue declined £50K due to one-time large order from Customer X being postponed from March to April. Normal monthly revenue trend remains flat."
Why This Matters
Controllers and CFOs use variance explanations to understand business performance. If you can explain 80% of variances by close time, the stakeholder review is faster and more credible. Plus, if auditors find a surprise in the P&L, you already have your explanation ready.
Further Reading
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