Closing the month: do your records match?

31 October: is everything recorded?

October is over. Kuting Kitchen issued hundreds of invoices, Shopee, Lazada and TikTok Shop paid out every few days, and suppliers sent their bills.

Before anyone files anything, Carla wants to know one thing: do the books match what really happened?

Everything you need to check

A month-end close is a short, fixed checklist. It checks that four sources agree: your invoices, the marketplaces' payout reports, the bank, and the books. Then the month is locked.

Do it in the first days of the next month, before the withholding returns due on the 10th. The close is good bookkeeping practice, not a BIR form: no one files it, but every return is built from it.

Check #1: Every sale is recorded

Check the invoice series: no missing numbers between the first and last invoice of the month, and every one is in the sales journal.

Then compare against each marketplace's completed orders. Returns and cancellations should be reversed, not left as sales.

Check #2: Every payout is broken down

Shopee's payout report for October: orders released ₱224,000, fees ₱33,600, tax withheld ₱1,000 (0.5% of ₱200,000, the sales before VAT), paid out ₱189,400.

Do the same for each marketplace. The books need all three pieces, not only the cash.

Check #3: The bank agrees

Add up October's deposits from Shopee in the bank statement: ₱189,400. Same as the report.

A payout released on the last day may land in the bank a day or two later. Note it as in transit (⌛); it should appear early next month.

Check #4: The books don't, by ₱72

The books show fees of ₱33,528, not ₱33,600. And Receivable – Shopee still shows ₱72.00 for orders Shopee has already paid out.

Same amount, two places: one payout was recorded without its fee. It's the ₱480 order from Lesson 3.2: its entry took only ₱408.00 off the receivable (₱405.86 cash + ₱2.14 withheld), not ₱480.00. The close caught it instead of BIR.

Fix it with an entry, then re-check

The fix goes in the general journal, dated October: debit Marketplace fees ₱64.29 and Input VAT ₱7.71, credit Receivable – Shopee ₱72.00. Now all three columns agree.

Why the general journal? No money moved: the cash was right, only the split was missing. Adjustments like this are what the general journal is for (Lesson 3.3).

Orders delivered but not yet released by Shopee stay in the receivable. That's normal: list them, and check they clear next month.

Check #5: Purchases and withholding

Every supplier invoice is recorded and valid (Lesson 3.5); unpaid ones are listed as payables. Each marketplace's fee invoices are filed with the payouts.

Then what Kuting Kitchen withheld for BIR in October: ₱1,500 from the rent (BIR Form 0619-E) and ₱0 from Jun's and Mae's pay (BIR Form 1601-C). Both are due 10 November.

We'll tackle the staff's withholding in Lesson 8.1.

Check #6: Post and balance

Post the journals to the general ledger and run the trial balance: debits must equal credits. Glance at Output VAT and Input VAT: they're what the Q4 2550Q (quarterly VAT return) will use in January.

Then mark October closed

All six checks pass, so October is closed. Anything found later goes in as a new, dated entry, never a quiet edit.

Close every month, and the quarter's returns are mostly done.

Pop Quiz: find the mismatch

Three small reconciliations from Kuting Kitchen's October. Pick what's wrong.