Monthly close process
The monthly close process integrates Hardfin's operational data with your financial close procedures. This workflow ensures accurate financial reporting while maintaining operational flexibility.
Overview
The Hardfin monthly close process follows a structured six-step workflow that guides controllers and finance teams through reviewing operational changes, validating journal entries, and locking period balances. Each step provides visualization, detailed journal entry review, and approval tracking to ensure complete and accurate financial reporting.
Step 1: Verify all details recorded
Goal: Confirm all transactions have complete accounting information before beginning the close process.
Before reviewing any journal entries, verify that all operational transactions for the period have the required accounting details allocated or completed. This includes:
Cost basis information for inventory purchases
Capitalization details for deployment costs (if needed)
Depreciation policies for asset deployments
Disposal accounts for sales and scrap transactions
Exception report: Hardfin provides an exception report showing any transactions with missing accounting details. The report allows you to enter missing information directly before proceeding with the close.
Transactions with incomplete accounting details may result in missing journal entry lines or incorrect balances. Complete all required fields before proceeding to Step 2.
Step 2: Review inventory rollforward and entries
Goal: Confirm Hardfin's operational flow and the resulting three inventory-related journal entries.
Inventory rollforward
The inventory rollforward provides a waterfall visualization showing the flow of inventory through the period:
Waterfall visualization: Start → Added → Deployed → Sold → Scrapped → End
Headline metrics:
Opening balance
+ Added
= Total
- Deployed (inventory capitalized to fixed assets)
- Sold
- Scrapped
= Ending balance
Linked inventory journal entries
Below the rollforward chart, review the associated journal entries:
User actions:
Export each journal entry for detailed review
Review each journal entry for reasonableness (amounts, SKUs, account mappings)
Mark each journal entry as "Reviewed ✅" once validated
Controller's review goal: Confirm operational changes make sense and nothing is missing.
Step 3: Review fixed-asset rollforward and entries
Goal: Confirm Hardfin's asset rollforward and the four fixed asset-related journal entries.
Fixed-asset rollforward
The fixed-asset rollforward provides a waterfall visualization showing the flow of fixed assets through the period:
Waterfall visualization: Start → Additions → Depreciation → Disposals/Scrap → End
Headline metrics:
Opening net book value (NBV)
+ Added from inventory
+ Capitalized from deployment
= Total
- Depreciation
- Sold
- Scrapped
= Ending net book value (NBV)
Linked fixed-asset journal entries
Below the rollforward chart, review the associated journal entries:
User actions:
Export each journal entry for detailed review
Review each journal entry for reasonableness (amounts, SKUs, account mappings)
Mark each journal entry as "Reviewed ✅" once validated
Controller's review goal: Confirm operational changes make sense and nothing is missing.
Step 4: Review adjustment entry (if applicable)
Goal: Reconcile any prior-period deltas and approve Hardfin's consolidated "prior-period adjustment" journal entry.
The adjustment entry captures any differences between Hardfin's current operational balances and the locked balances from the previous period close. This entry ensures your GL stays in sync with operational changes that may have been entered after the prior period was locked.
For example, if you sold a fixed asset in the prior period, but the sale was not recorded until after the prior period was locked, the adjustment entry will automatically handle truing up the gain or loss on the sale.
Adjustment journal entry
Review the adjustment entry if prior-period differences exist:
If no prior-period differences exist, the system displays: "No prior-period adjustments required ✅"
User actions:
Export the adjustment entry for detailed review
Review the adjustment entry for reasonableness (amounts, accounts)
Mark the adjustment entry as "Reviewed ✅" once validated
Controller's review goal: Confirm the adjustment entry is reasonable and nothing is missing.
Step 5: Download detailed supporting schedules (optional)
Goal: Export detailed supporting documentation for audit files and workpaper preparation.
For audit and compliance purposes, you may want to download detailed supporting schedules that provide asset-level detail beyond the SKU-level journal entries. These schedules include:
Asset details at the serial number level
Individual snapshots of the current inventory and fixed asset lists
Individual asset depreciation calculations
Detailed disposal transaction records
Cost basis records and allocations
These schedules complement the journal entries and provide complete traceability from individual assets back to the GL postings.
User actions:
Export the schedules for detailed review (optional)
Review the schedules to resolve specific questions (optional)
Save the schedules to your audit files (optional)
Step 6: Confirm posting and lock period
Goal: Final approval to freeze all balances and establish the new baseline for the next period.
Period review summary
Before locking the period, you will be able to review a comprehensive summary of all completed steps.
An example of this summary includes:
📔 Period review summary: July 2025
---------------------------------------------------------------
✅ Inventory rollforward & journals ............ Reviewed
✅ New inventory purchases ................... Reviewed
✅ Inventory sales ........................... Reviewed
☑️ Inventory scrap ........................... None
✅ Fixed asset rollforward & journals .......... Reviewed
✅ Inventory deployments ..................... Reviewed
✅ Depreciation .............................. Reviewed
☑️ Fixed asset sales ......................... None
✅ Fixed asset scrap ......................... Reviewed
✅ Adjustment entry ............................ Reviewed
---------------------------------------------------------------
🏁 All reviews completePeriod locks computed
Review the exact balances that will be locked for each account as of the period end date. An example of this summary includes:
🔍 Period locks computed: as of July 31, 2025
---------------------------------------------------------------
| Account | Lock type | Value ($) |
|-------------------------------|-------------|-----------------|
| Inventory | Balance | 16,212.98 |
| Inventory clearing | Balance | 0.00 |
| Cost of goods sold | Cumulative | 1,218,400.00 |
| Inventory write-offs | Cumulative | 47,900.00 |
| Capitalized deployment costs | Cumulative | (84,300.00) |
| Fixed assets | Balance | 9,909,121.10 |
| Accumulated depreciation | Balance | (1,780,600.00) |
| Depreciation expense | Cumulative | 620,000.00 |
| Asset disposal clearing | Balance | 0.00 |
| Gain on disposal | Cumulative | 19,500.00 |
| Loss on disposal | Cumulative | 34,200.00 |
---------------------------------------------------------------
🕓 Period lock readyConfirmation and signature
Before locking the period, you must provide confirmation and signature. An example of this summary includes:
Required confirmation
☑️ I confirm that all Hardfin journal entries for July 2025 have been posted and approved in the company's general ledger.
Optional notes
Enter any notes about the period close for future reference (e.g., "Late shipment for $50,000 will appear in next period's adjustment entry").
Required signature
Enter your name to provide an electronic signature for the period lock.
Locking this period will freeze all Hardfin balances as of July 31, 2025. Any subsequent operational changes to prior periods will appear as prior-period adjustments during the next close.
User actions:
Check the confirmation
Enter any notes (optional)
Sign your name for the e-signature
Click "Confirm & lock period" to complete the period close
Post-lock behavior
Once the period is locked:
Hardfin snapshots every account and SKU balance as of the period end date
The system records the approver name, date/time, and any notes entered
Electronic signature text is captured and stored for audit purposes
The period displays as "Locked ✅ July 31, 2025" throughout Hardfin
Any operational changes dated on or before July 31 will be automatically routed to the "prior-period delta" report for the August close
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