Is your nonprofit’s month-end close feeling more like a scramble than a system? Today I’m breaking down why the close-process is so critical to your nonprofit, and what’s really slowing this process down.

     For nonprofit finance teams, the month-end close isn’t just a routine task—it’s mission-critical. Yet for many organizations, what should be a structured, straightforward process often turns into a scramble. Reports are late, reconciliations are rushed, and decision-makers are left waiting on numbers they need to act.

     If this sounds familiar, you're not alone. Many nonprofits find themselves stuck in a cycle of delays and bottlenecks that make the month-end close feel more like a fire drill than a reliable routine.

     So let’s unpack what the month-end close is, why it matters to your mission, and where the process typically breaks down.

What Is the Month-End Close?

In simple terms, the month-end close is how your organization finalizes its financial activity for the previous month. It’s how you ensure every donation, payroll run, vendor payment, and grant expense is properly recorded and reconciled.

Here’s what it typically includes:

• Recording all financial transactions (revenue, expenses, payroll, etc.)
• Reconciling accounts (bank statements, accounts payable, grant receivables, restricted funds to name a few)
• Making journal entries or adjustments
• Reviewing the books for errors
• Producing internal reports for leadership and external reports for funders, auditors, and boards

Why Is the Month-End Close So Important for Nonprofits?

     Unlike for-profit businesses, nonprofits operate under a unique set of financial rules and stakeholder expectations. A delayed or error-filled close can affect not just your operations, but your credibility and funding.

Here’s why this process matters:

1. Stewardship and Transparency

Donors want to see how their resources are being stewarded. Delays in reporting can damage trust, especially if it affects your ability to show impact in a timely way.

2. Compliance

Nonprofits should hold themselves to high compliance standards.  You are stewarding resources for the good of the public – you do not own what you are managing. An accurate, timely close helps ensure accountability.  Also this fulfills fiduciary duty of the board! (for more on this, check out my previous post What is the Fiduciary Duty of a Nonprofit Board Member?)

3. Better Decision-Making

Leadership needs accurate data to make strategic, forward-focused decisions. If financial reports are always late or incomplete, your team is flying blind.

Here’s a real world example that clearly illustrates this truth: I have a nonprofit client that I work with now, but what led them to contact me is what I want to share with you. You see, prior to engaging me, their finance committee had gone one year without receiving a financial report.  ONE. YEAR. They had not received a balance sheet- ever.  They were only receiving a spreadsheet from their finance director, which offered no sense of accuracy or reality with what was actually happening in the bank accounts. This prompted their finance committee chair to call a “timeout” in order to bring in some help, which is where I came in.

     Now, four years later, through the systems I’ve helped them implement, they are getting very prompt financial reports, and it’s beautiful to watch them making data-driven, forward-looking strategic decisions. In fact, at the last meeting I participated in, they were making some very big decisions about facility improvements and even proactively anticipating an eventual cost, including estimating the time horizon and evaluating their savings plan to be prepared for that major purchase in the future. This is the kind of rewarding work I love to do.

4. Cash flow and budget Visibility

Cash flow and the performance of budget to actual results is the lifeblood of nonprofit operations. A strong close process helps your team stay ahead of potential shortfalls or overages. 

Why Do So Many Nonprofits Struggle With Month-End?

Several issues tend to trip up nonprofit organizations:

• Data silos between departments
• Manual data entry and reconciliation
• Outdated or disconnected financial systems
• Over-reliance on spreadsheets
• Lack of automation and standardized processes

Each of these can cause delays, errors, and burnout—and we’ll dive into each one in this series.

What’s Next?

If your nonprofit’s month-end close is taking way too long or causing way too much stress, it’s time to take a closer look at what’s slowing things down. Next week, we’ll tackle one of the biggest culprits: data silos—and how they create chaos when teams and systems aren’t working in sync.

Subscribe to be notified next week when I’ll share the second video in this five-part series called: “Data Silos Are Slowing Down Your Finance Team—Here’s How to Break Them.”

     In the meantime, if you need help with a specific question right now or just need to talk with a human about a nonprofit finance situation, you can easily book a one-time consultation with me here. I look forward to serving you!