The key decision
Tax readiness starts with a reliable monthly close.

For an international business operating through a U.S. company, tax preparation starts long before a filing deadline. The practical question is whether the books explain what happened, where the cash went and which issues require a CPA’s review. A repeatable monthly close makes those answers easier to produce.

1. Reconcile every cash account

Match the ledger to bank, credit card and payment processor statements. Record processor fees, refunds and transfers separately so that net deposits are not mistaken for gross sales. Keep personal and business spending separate, and investigate unmatched transactions while the supporting information is still available.

2. Explain what remains unpaid

Prepare customer and supplier balances by due date. An invoice can be recorded as revenue without having been collected; a supplier commitment can affect next month’s cash even when it has not yet been paid. Review overdue balances with the commercial team, identify disputed invoices and assign responsibility for follow-up.

A deposit is the end of a reconciliation, not its starting assumption

Suppose a payment processor reports USD 10,000 of customer payments, USD 500 of refunds and USD 300 of fees, producing a USD 9,200 bank deposit. The amounts are hypothetical and exclude sales tax, reserves, chargebacks and timing differences. Recording only the net deposit as sales would conceal the refunds and fees and could distort margin analysis.

Illustrative amounts in USD. The appropriate entries depend on the transaction facts and accounting policies.

The accounting team should reconcile the processor report, customer records and bank statement. Confirm whether the payment relates to an invoice already recorded or an advance for future delivery; receipt of cash and recognition of revenue are not necessarily simultaneous. When several settlement batches cross month-end, an outstanding processor balance may explain why the bank has not yet received the full amount.

Do not force the difference into an unexplained expense. Identify its source and retain evidence. A recurring settlement difference might come from fees, refunds, reserves or a reporting cutoff. Each explanation points to a different reconciliation item and potentially a different operational action.

Use a close calendar with clear dependencies

• Collect: Obtain complete bank, card, processor, payroll and sales records for the agreed period. Confirm that every relevant account is included.

• Reconcile: Match balances to supporting schedules and resolve intercompany differences with the counterparty's finance team.

• Review: Check unusual movements, period cutoffs, aged balances and material estimates. Record questions that require a CPA or other specialist.

• Approve: Have a designated reviewer sign off the management package and document remaining exceptions.

Dates should reflect the company's systems and staffing. A nominal five-day close is not an achievement if key accounts remain unsupported. Start with a realistic timetable, then shorten it by addressing repeated bottlenecks such as missing invoices or late inventory information.

Keep an exception register

For every unresolved item, record the amount, account, reason, evidence required, responsible person and target resolution date. Separate items that prevent reliable reporting from questions that can be explained transparently while specialist review continues. Management should know what is uncertain before using the figures for pricing, borrowing or distributions.

An owner transfer without documentation is a good example. The bank confirms that cash moved, but it does not establish whether the movement represents capital, a loan, reimbursement or a distribution. Obtain the underlying agreement and explanation, then ask the responsible professional to confirm the treatment. Consistent descriptions and records also make year-end reporting easier.

Turn the close into a useful management conversation

Compare results with budget and the previous period, but focus on material drivers rather than every line. Ask whether sales growth converted into collections, whether overdue receivables increased and whether margins changed because of pricing, product mix or costs. Connect these findings to the next cash forecast and assign follow-up actions.

The monthly package should leave a clear audit trail from the management report to the ledger and supporting records. This improves continuity when staff or service providers change. It also helps management distinguish an operating problem from a classification error, instead of discovering both for the first time during tax preparation.

3. Document owner and related-party movements

Money received from a shareholder is not automatically sales revenue. Record the purpose of capital contributions, loans, reimbursements and distributions, with appropriate supporting documents. For groups operating internationally, reconcile intercompany balances on both sides and flag differences for review.

Foreign ownership can create additional reporting obligations. Under the IRS Form 5472 instructions, a foreign-owned U.S. disregarded entity may have to submit Form 5472 with a pro forma Form 1120 when it has reportable transactions. A lack of sales does not, by itself, settle the filing question.

4. Build a clear review package

A useful monthly package combines the balance sheet, income statement, reconciliations, receivables and payables schedules, and a short list of unresolved questions. Add supporting invoices, contracts and ownership changes where relevant. The IRS recordkeeping guidance explains why supporting records matter for financial statements and tax returns.

5. Keep one calendar and one accountable owner

Ask the relevant tax professional to confirm federal, state and local obligations based on the company’s classification, ownership, activities and locations. Track income tax, sales tax and payroll requirements separately where applicable. Assign an owner and an internal preparation date for each obligation; a filing deadline alone is not a work plan.

A practical monthly handover

Our suggested sequence is simple: collect statements, reconcile balances, resolve exceptions, review the financial statements and hand over an agreed information package. Set realistic dates with the bookkeeper and CPA, then track unresolved items until they are closed. This is a management workflow, not a substitute for entity-specific tax advice.

Lev Partners supports U.S. accounting and tax coordination, helping connect financial records, management reporting and the work of relevant professionals. Contact us to review your company’s monthly reporting and tax preparation process.Your U.S. services contact

Canan Kargacı — Director of U.S. Tax Compliance, Lev Partners. Canan is Lev’s service contact for U.S. accounting and tax-compliance coordination. She helps scope the company’s reporting, accounting and compliance needs and coordinate the relevant workstreams with the team.

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