Business Year End Strategy and Checklist
The end of the year is a great time to assess where your business stands financially and how its current financial situation compares to previous years.
What are the Benefits of Year-End Close?
The year-end close is crucial for a company as it involves finalizing financial statements for the fiscal year, ensuring accuracy and compliance with regulations. This process includes balancing accounts, making adjustments and preparing financial statements. The benefits of a year-end close are significant:
What Makes Year-End Closing Difficult?
Preparing for the end of the fiscal year comes with numerous challenges, particularly for business owners who wait till the end of the year to compile financial statements. Here are common issues faced by business owners throughout the fiscal year, making financial closing a daunting task:
Missing Receipts and Invoice
Tracking paper receipts and supplier invoices is a constant struggle, causing significant delays in expense reconciliation and other tasks during periodic closing.
Human Error
Handling piles of paperwork leads to inevitable mistakes. Simple errors in data entry or document misplacement can result in costly consequences
Manual Data Entry
Inputting data into spreadsheets by hand is time-consuming and error-prone. Software offers more accurate and efficient ways to capture and enter data.
Recommended Year-End Close Checklist
To ensure a seamless year-end close, start by planning ahead. This involves examining financial data and paperwork, setting clear goals and timelines, and efficiently allocating resources.
Review Financial Statements
Balance Sheet: Ensure that assets, liabilities & equity are accurate.
Income Statement: Review revenue, expenses, and net income.
Reconcile Bank Statements
Reconcile all bank and credit card statements.
Address any discrepancies or outstanding transactions.
Update Depreciation Schedule
Update asset depreciation schedules for fixed assets.
Verify that the depreciation entries are accurate and maximized for tax purposes.
Accounts Payable
Review outstanding bills and vendor invoices (A/P Aging Report).
Ensure that all expenses are recorded accurately with receipts.
Accounts Receivable
Review outstanding customer invoices
(A/R Aging Report).
Address any overdue payments and consider sending reminders.
Tax Planning
Assess taxable income and evaluate potential deductions.
Consult with a tax professional to explore year-end tax-saving strategies.
Evaluate Cash Flow
Assess cash flow trends and make projections for the upcoming year.
Plan for any necessary adjustments to maintain healthy cash flow.
Set Financial Goals
Define financial goals and strategic objectives for the upcoming year.
Develop annual budget by month and financial plan.
Consult with Accountant
Schedule a meeting with your accountant to discuss year-end financials.
Seek advice on tax planning and financial strategies.
How Our Team Can Help You?
Bookkeeping: Review & reconcile your financial records, ensuring that all transactions are accurately recorded.
Financial Statement Preparation: Prepare accurate financial statements, including the income statement, balance sheet, and cash flow statement.
Tax Planning & Compliance: Identify potential tax-saving opportunities and ensure compliance with tax regulations, minimizing your tax liability.
Financial Analysis & Planning: Provide in-depth financial analysis which helps you understand trends, identify areas for improvement, and make informed strategic decisions for the upcoming year.