Closing the month on the day the run settles

Ask a controller how long it takes to close contractor spend each month and the honest answer is usually “a day, if nothing is wrong.” Something is usually wrong.

The work itself is familiar. Export the month's payouts from the payment provider. Export the bank's statement lines. Match one to the other, which is easy for wires and miserable for ACH batches that arrive as a single line covering eighty payments. Recode the fees, which the provider charged in a lump. Fix the three payments that were returned and resent. Post it all to the ledger.

Where the time actually goes

When we sat with customers at month-end, almost none of the time went to the accounting itself. It went to rebuilding information that existed at the moment of payment and was lost on the way to the ledger: which contractor, which project, which rail, what fee.

A batch ACH line on a bank statement does not know any of that. The payout provider knows all of it. The month-end close is mostly the work of carrying that knowledge across by hand.

Post at settlement, not at month-end

So Pinnacle posts each run to your general ledger the afternoon it settles, as journal lines rather than one summary entry. Each line carries:

• the expense account and class you mapped for that contractor or project,
• the contractor's name and the run it belonged to,
• the rail it travelled on and the fee it cost, posted to your fees account.

Returned payments post as their own reversing lines on the day they come back, and the resent payment posts when it settles. Nothing is netted, so the ledger tells the same story the run log does.

What is left at month-end

A review. You open the month's runs, check that each one shows Posted, and look at the short list of anything that did not post — usually a contractor added mid-month without an expense mapping. Fix the mapping and it posts.

For Sablewood Builders, who pay 140 framers across six states every week, that review takes about forty minutes. It used to take a day and a half.

The fastest close is the one that happened a little bit every afternoon all month.

What auditors ask for

Posting at settlement also changes the audit. When an auditor samples contractor payments, the question is always the same: show me the approval, the payment and the entry. With a summary entry at month-end, those live in three systems and are tied together by a spreadsheet someone built in a hurry.

When each line carries its run, the trail is one click long. The journal line links to the run, the run shows who approved it and with which key, and the receipt shows the minute the contractor was paid. Our customers' auditors have started asking for the export by name, which we take as a compliment.

Getting there

The setup is one sitting: connect your accounting system, map Pinnacle's accounts to yours, and decide how contractors map to expense accounts — by default, by team or by project. Most teams finish it in under an hour and let the next run be the test.

From then on, the month-end close for contractor spend is no longer a project. It is a list you read.