Project Management Framework
Closure - Financial Closure
Definition
Financial closure is the process of completing all project-related financial transactions, finalizing and closing the project financial accounts, disposing of project assets and releasing the work site.
Why is this important?
Financial closure is a prerequisite to project closure and the
Post Implementation Review (PIR). A project cannot be closed until all financial transactions are complete, otherwise there may not be funds or authority to pay outstanding invoices and charges. Financial closure establishes final project costs for comparison against budgeted costs as part of the PIR. Financial closure also ensures that there is a proper disposition of all project assets including the work site.
How to do it well
- Establish, in advance, and publish to all project staff and vendors the deadline date for the completion of all financial transactions and closing of financial accounts.
- Verify that all acceptance criteria in the Statement of Work have been met prior to payments to vendors and consultants, if applicable.
- Annotate "Final Payment" on all vouchers.
- Verify that there are no outstanding invoices or unresolved financial obligations.
- Close financial accounts according to applicable agency, state and federal accounting procedures.
- Comply with all applicable funding source requirements for records retention.
- Comply with all applicable funding source requirements for financial reporting.
- Notify agency contracts office that final payments have been processed for all project related contracts.
- Transfer or dispose of assets according to the Acquisition Plan.
- Release the work site according to agreements with facilities management.
Checklists