Monthly Financial Reporting Checklist

Export the prior-month advisory fee debit reports from each custodian (Schwab, Fidelity, Altruist, Pershing). Confirm the basis (average daily balance, period-end, or period-start) matches the IAA fee schedule — mixed bases across custodians is the most common reconciliation gotcha.

Three-way tie-out: internal fee calculation in the portfolio system (Orion / Black Diamond / Tamarac), the invoice generated to the client, and the actual debit on the custodian statement. Variance over $50 per account triggers a per-account review before close.

Cover recurring vendor bills (Salesforce / Wealthbox, eMoney, Riskalyze, Smarsh, custodian platform fees) plus E&O premiums and rent. Watch the cutoff: invoices dated in the prior month but received this month belong in last month's accruals, not this month's expenses.

Tie month-end book balance to the bank statement. Investigate any uncleared item over 30 days old. The fee deposit account from the custodian sweep should reconcile to the fee billing report from the prior step.

Accrue payroll, bonus, and 401(k) match through period end. Amortize prepaid E&O, prepaid software (annual subscriptions), and prepaid rent. Record any earned-but-unbilled performance fees per the firm's revenue recognition policy.

Export the trial balance from the GL. Confirm intercompany eliminations between the RIA entity and any affiliated insurance agency or holding company net to zero before rolling forward.

Generate statements in the firm's reporting package. RIAs registered with the SEC must track minimum net capital and any custody-rule-related balances; flag any balance sheet line that affects the next ADV update.

Compare actuals to budget and trailing three-month average. Document any line item with variance over 10% or $5,000, whichever is greater. Common drivers: AUM-based fee growth, advisor comp true-ups, and one-time technology spend.

Write a one-paragraph driver explanation per flagged line. Senior management and the CCO will reference this in the next quarterly review and during the annual surprise exam if applicable.

Controller walks the trial balance, reconciliations, and variance commentary. Tie advisory fee revenue back to AUM rolls from the portfolio system — a divergence here is usually a fee schedule or tier setup issue and warrants a per-account check.

Each AJE needs a memo, supporting workpaper, and preparer/reviewer initials. Books-and-records rules require this trail to survive a six-year SEC retention window.

Update the 12-month forecast with current AUM, net new asset trends, and any known advisor hires or departures. Forecast feeds the partner distribution model and the CCO's compliance budget.

Standard package: P&L, balance sheet, cash flow, AUM roll, advisory fee yield, and variance commentary. Include any Reg BI or custody-rule-related metrics the CCO has asked to track on a monthly basis.

Scan SEC Risk Alerts, FINRA Regulatory Notices, and state administrator updates issued in the prior month. Update internal checks for marketing rule, custody rule, off-channel communications, and Form CRS delivery as new guidance lands.

For RIAs deemed to have custody (including SLOA arrangements), file the month's reconciliations, trial balance, and AJE support in the audit binder. PCAOB-registered auditors will pull this during the annual surprise exam.

Sample-test advisory fee billing accuracy, Form CRS delivery on new accounts, and email archive completeness in Smarsh or Global Relay. Off-channel communication gaps are the single highest-frequency exam finding for RIAs and BDs since 2022.

Each finding gets an owner, a remediation action, and a target close date. Repeat findings across cycles are the pattern that gets escalated to a formal MRA at the next exam.

If the self-test surfaced a material issue, the CCO determines whether the matter warrants a 4530 disclosure, ADV amendment, or SAR review. Document the determination and rationale in the compliance file.

Set a 30-minute walkthrough with the external audit team to flag known issues before fieldwork. Surfacing issues early shortens fieldwork and reduces the chance of late audit adjustments.