---
title: "What is soft close?"
description: "Soft Close explained in plain English: definition, how it works, an example, and how it appears in QuickBooks and Xero."
url: https://ledgerbpo.com/glossary/soft-close/
updated: 2026-09-11
publisher: LedgerBPO (SS Support Network LLC)
language: en-US
---

# What is soft close?

Glossary

A soft close is a lighter month-end close that reconciles the main accounts and produces usable financial statements quickly, deferring some low-impact adjustments or detailed reviews to the next full close instead of chasing every item.

Updated September 2026

## How soft close works

A soft close focuses on the accounts that matter most for a fast, reliable set of numbers: cash, accounts receivable, accounts payable and the major expense categories. Smaller accruals, minor reconciling items or detailed schedule updates can wait, since they would not change the overall financial picture materially even if adjusted immediately.

Businesses use a soft close for interim months when speed matters more than full precision, then run a hard close at quarter end or year end when every account needs to be fully reconciled without exception. The key is being clear about which items were deferred and why, so nothing gets forgotten permanently between closes.

## Example

A business runs a soft close for January, reconciling its main bank account and reviewing accounts receivable and payable, producing a balance sheet and income statement within three business days of month end. A $300 vendor credit and a minor prepaid expense schedule update are deferred to the full quarterly close, noted on a tracked list so they are not missed later on.

## Soft Close in QuickBooks Online vs Xero

Not software-specific. QuickBooks Online and Xero support closing dates and locked periods that can be applied loosely for a soft close and tightened for a hard close, but the distinction itself is a process choice rather than a specific software feature.

## Common mistakes

- Items deferred during a soft close are never tracked on a list, so they get forgotten entirely instead of cleared out at the next full close.
- A soft close is used every single month with no hard close ever scheduled, letting deferred items accumulate into a materially inaccurate balance sheet.
- Numbers from a soft close are treated as final and shared externally, when they were only ever meant to be a fast interim estimate.

## Why it matters

A soft close gives a business fast, usable numbers for routine decisions, but only if deferred items are tracked and eventually cleared at a full close. Treating soft close figures as final, or never running a hard close at all, lets small inaccuracies build up unnoticed. For owners who need quick monthly visibility without sacrificing year-end accuracy, the soft close works only when paired with a disciplined hard close on a regular schedule.

## Related terms

- [Hard Close](https://ledgerbpo.com/glossary/hard-close/)
- [Month-end Close](https://ledgerbpo.com/glossary/month-end-close/)
- [Close Package](https://ledgerbpo.com/glossary/close-package/)
- [All terms](https://ledgerbpo.com/glossary/)

## How LedgerBPO handles soft close

We run a soft close on the accounts that drive decisions, cash, receivables and payables, within a few business days each month, with a tracked list of deferred items cleared out at the next full close.

[Close the books in days, not weeks](https://ledgerbpo.com/services/month-end-close/)

Next step

## Books closed. Invoices paid. Every month.

Tell us what is going on with your books or billing. You will hear from a named person within 1 business day, with a custom quote and a plan for the first close.

- Reply from a named person within 1 business day
- No setup fee, month-to-month
- Your software, your data, no lock-in

Start with a custom quote

[Get a custom quote](https://ledgerbpo.com/get-a-quote/) [Book a 20-minute call](https://ledgerbpo.com/book-a-call/) Or call [+1-657-777-0006](tel:+16577770006) during US, UK or Australian business hours.

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Source: https://ledgerbpo.com/glossary/soft-close/ · Contact: https://ledgerbpo.com/contact/ · Full site map for agents: https://ledgerbpo.com/llms.txt