Month End Close Orchestrator

Overview

Orchestrates the month-end accounting close by generating checklists, tracking reconciliation progress, drafting journal entries, running variance analysis with commentary, and rendering a close status dashboard. All outputs are drafts for human review.

Workflow

<Definition - Close Phases> The month-end close follows three sequential phases:

• Pre-close (T-3 to T-1): Cut-off procedures, sub-ledger reconciliation, accrual identification, intercompany confirmations. Work that can begin before the period officially ends.
• Core Close (T+1 to T+3): Journal entry preparation, account reconciliations, trial balance review, intercompany eliminations, foreign currency revaluation. The primary accounting work.
• Post-close (T+4 to T+5): Variance analysis, flux commentary, management reporting, close certification, period lock confirmation.

"T" refers to the last calendar day of the accounting period. T+N means N business days after period end. </Definition - Close Phases>

<Definition - Materiality Thresholds> Thresholds that determine the level of investigation required for variances:

• Immaterial: Below 5% AND below $10,000 absolute change. Note but no commentary required.
• Notable: Between 5-10% OR between $10,000-$50,000. Brief one-line commentary required.
• Material: Above 10% OR above $50,000. Full commentary with root cause, business driver, and expected recurrence pattern required.

These are defaults. If the user provides organization-specific thresholds, those take precedence. </Definition - Materiality Thresholds>

<Definition - Variance Types> Classification of period-over-period differences:

• Favorable: Revenue higher than prior period or budget. Expenses lower than prior period or budget.
• Unfavorable: Revenue lower than prior period or budget. Expenses higher than prior period or budget.

Root cause categories:

• Volume: Variance driven by quantity changes (units sold, headcount, transaction count).
• Price/Rate: Variance driven by per-unit cost or revenue rate changes.
• Mix: Variance driven by composition shifts (product mix, customer segment, geography).
• Timing: Variance caused by accrual timing differences or cut-off shifts between periods.
• One-time: Non-recurring items (write-offs, settlements, restructuring charges). </Definition - Variance Types>

<Workflow - MonthEndClose description="End-to-end month-end close orchestration from pre-close through post-close certification." tools=[file_read, file_write, run_python, open_in_session_tab] triggers=["start month-end close", "close checklist", "reconciliation status", "variance analysis", "journal entry template", "where are we on the close"]

1. [Ask user] Confirm the close period and gather inputs. Request: close_period (required), chart_of_accounts path (optional), close_calendar path (optional), prior_period_file path (optional). If the user provides a close calendar file, read it. If not, present the default T+5 schedule and confirm acceptance per Rule 10. If fails: If the required close_period is not provided, re-ask the user for it before continuing; if an optional file path is invalid, note it and proceed with the documented defaults.

2. [Agent] If a chart_of_accounts file is provided, read and parse it. Extract account codes, account names, account types (Asset, Liability, Equity, Revenue, Expense), and any sub-ledger mappings. Build an internal lookup table for validation in subsequent steps. If no file is provided, use a generic structure (1000-series Assets, 2000-series Liabilities, 3000-series Equity, 4000-series Revenue, 5000-series Expenses) and note that account codes will not be validated. If fails: If the chart of accounts file cannot be read or parsed, notify the user and continue with the generic structure, noting that account codes will not be validated.

3. [Agent] Generate the close checklist using the Close Checklist template. Populate dates based on the close calendar or the default T+5 schedule. Assign each task to its phase (Pre-close, Core Close, Post-close). Render as a markdown table and save to the workspace. Open in the session tab for the user to review. If fails: If the checklist cannot be generated or saved, report the specific error to the user and present the checklist inline so the close can still proceed.

4. [Ask user] Present the checklist and ask the user to confirm task assignments, add organization-specific tasks, remove irrelevant ones, or adjust deadlines. Incorporate feedback and regenerate if needed. If fails: If the user does not respond or the checklist cannot be displayed, keep the current checklist as-is and tell the user it is saved for later review.

5. [Agent] If the user requests reconciliation tracking, generate a reconciliation status tracker. For each balance sheet account (or the subset the user specifies), create a row with: account code, account name, prior period balance, current period balance, preparer, reviewer, status (Not Started, In Progress, Reviewed, Approved), and notes. Save as a markdown table or CSV per user preference. If fails: If the tracker cannot be generated, report the error to the user and list the accounts to be reconciled in plain text so tracking can continue manually.

6. [Ask user] When the user requests a journal entry, gather: entry description, debit account(s) and amount(s), credit account(s) and amount(s), supporting documentation reference, and whether the entry is an accrual requiring reversal. Validate that debits equal credits. Validate account codes against the CoA if available (Rule 7). Generate the entry using the Journal Entry template. Present for review. If fails: If required entry details are missing or debits do not equal credits, re-ask the user for the missing or corrected values before generating the entry.

7. [Decide] If prior_period_file is provided and the user requests variance analysis, proceed to step 8. Otherwise, skip to step 9 or ask the user if they want to provide prior period data.

8. [Agent] Read both current and prior period data. Using run_python, compute period-over-period variances for each account or line item. Classify each variance by materiality threshold. For material variances, apply the Variance Commentary template, prompting the user for the business driver explanation per Rule 4. Render the variance report as a formatted table with commentary column. Save and open in the session tab. If fails: If the current or prior period data cannot be read or compared, report the specific error to the user and skip variance analysis rather than producing unverified figures.

9. [Agent] Generate the close status dashboard summarizing: phase progress (percentage of tasks complete per phase), open items count, overdue items (past deadline), pending journal entries awaiting approval, reconciliation completion rate. Render as a structured markdown document with section headers for each metric. Save and open in the session tab. If fails: If the dashboard cannot be generated, report the error and summarize phase progress and open items in plain text instead.

10. [Ask user] Present the dashboard and ask: "Are there tasks to mark complete, items to escalate, or additional journal entries needed?" Loop back to the relevant step based on user response. When all checklist items show complete status, present the close certification summary and confirm the user is ready to lock the period. If fails: If the user does not respond or the dashboard cannot be displayed, take no lock or completion action and leave the close in its current state for later review.

</Workflow - MonthEndClose>

<Template - Close Checklist>

markdownCopy code
# Month-End Close Checklist: {{close_period}}

| # | Phase | Task | Owner | Deadline | Status | Notes |
|---|-------|------|-------|----------|--------|-------|
| 1 | Pre-close | Confirm sub-ledger posting complete (AP, AR, Payroll, FA) | | T+1 | Not Started | |
| 2 | Pre-close | Revenue cut-off review | | T+1 | Not Started | Verify delivery dates vs. invoice dates |
| 3 | Pre-close | Expense cut-off review | | T+1 | Not Started | Confirm prepaid/deferred entries |
| 4 | Pre-close | Intercompany balance confirmation | | T+1 | Not Started | Both parties must confirm |
| 5 | Core Close | Post recurring journal entries | | T+2 | Not Started | Depreciation, amortization, allocations |
| 6 | Core Close | Post accrual entries | | T+2 | Not Started | Include reversal instructions |
| 7 | Core Close | Foreign currency revaluation | | T+2 | Not Started | Confirm spot rate source and date |
| 8 | Core Close | Intercompany eliminations | | T+3 | Not Started | Must net to zero |
| 9 | Core Close | Balance sheet reconciliations | | T+3 | Not Started | All accounts above materiality |
| 10 | Core Close | Trial balance review | | T+3 | Not Started | Run after all entries posted |
| 11 | Post-close | Variance analysis and flux commentary | | T+4 | Not Started | Material variances require full commentary |
| 12 | Post-close | Management reporting package | | T+5 | Not Started | |
| 13 | Post-close | Close certification sign-off | | T+5 | Not Started | Controller approval |
| 14 | Post-close | Period lock confirmation | | T+5 | Not Started | Prevent post-close entries |

Adjust tasks, owners, and deadlines to match your organization's close procedures.

</Template - Close Checklist>

<Template - Journal Entry>

markdownCopy code
# Journal Entry - DRAFT - NOT POSTED

**Period:** {{close_period}}
**Entry Description:** {{description}}
**Prepared by:** {{preparer}}
**Date:** {{entry_date}}
**Reversal Required:** {{yes_no}} {{reversal_date_if_applicable}}
**Supporting Documentation:** {{reference}}

| Line | Account Code | Account Name | Debit | Credit |
|------|-------------|--------------|-------|--------|
| 1 | {{acct_code}} | {{acct_name}} | {{amount}} | |
| 2 | {{acct_code}} | {{acct_name}} | | {{amount}} |

**Total Debits:** {{total_debits}}
**Total Credits:** {{total_credits}}
**Balanced:** {{yes_no}}

**Approval:**
- [ ] Preparer sign-off
- [ ] Reviewer sign-off
- [ ] Controller approval
- [ ] Posted to GL (date: _______)

This is a draft entry. Do not post without completing all approval steps.

</Template - Journal Entry>

<Template - Variance Commentary>

markdownCopy code
# Variance Analysis: {{close_period}} vs. {{comparison_period}}

| Account | Prior Period | Current Period | $ Variance | % Variance | Materiality | Direction | Commentary |
|---------|-------------|---------------|------------|------------|-------------|-----------|------------|
| {{acct_name}} | {{prior_amt}} | {{current_amt}} | {{dollar_var}} | {{pct_var}} | {{threshold}} | {{fav_unfav}} | {{commentary}} |

## Commentary Guidelines

For each material variance, document:
1. **Root cause category:** Volume, Price/Rate, Mix, Timing, or One-time
2. **Business driver:** The specific operational event or decision that caused the variance
3. **Expected recurrence:** One-time, seasonal, or ongoing trend
4. **Action required:** None, monitor next period, or escalate to management

Variances below the immaterial threshold are noted but do not require commentary.

</Template - Variance Commentary>