The fourth quarter can be a busy time for many people, in many professions, for many reasons. But for financial professionals, it poses a special kind of challenge: It’s their job to close your company’s books for the fiscal year. This process involves the multi-step preparation of accounts, statements and reports and requires extensive expertise in budgeting, forecasting and regulatory compliance, along with unwavering organizational skills and attention to detail.
End of Year Financial Considerations
Closing Time
Also known as closing the books, year-end closing is the process of reviewing, reconciling and verifying that all your company’s financial transactions and ledgers for the year add up. The goal – and the responsibility of your accountants and other financial experts – is to produce a final statement to be stored and made available for potential audit purposes.
- The potential legal liabilities can be severe. You need to file an annual report on time and without error every single year, and you need the process to be smooth and flawless.
Common struggles for financial pros at this time include:
- Missing receipts and invoices: These need to be tracked down, which requires efficient, effective communication and interaction with employees and possibly vendors and suppliers, as well.
- Human error: Even the simplest incorrect entry on a spreadsheet can result in costly consequences. So your financial pros need to have an eagle eye in spotting any such discrepancies.
Steps to make sure your books are closed accurately and in a timely fashion include:
- Compiling financial documents. These include bank and credit card statements, inventory counts, a copy of the previous year’s tax return, loan account and merchants’ statements, and payroll reports.
- Preparing a closing schedule. A detailed calendar with target dates for everyone involved is invaluable.
- Gathering any outstanding invoices or receipts. Automation software that includes digital receipt capture can be very helpful as it enables employees to upload paper documents instantly.
- Reviewing all asset accounts. This means ensuring that recorded transactions match evidence from credit card statements and bank statements, as well as invoices and receipts.
- Reconciling all transactions. Likewise, everything needs to line up, with every cent accounted for.
- Closing out and accruing accounts receivable and payable. Your financial pros need to compare amounts received or paid against what has been accrued. This ensures that all records of money coming in or going out of your business matches what has actually occurred during the year.
Is your accounting and finance team ready for year-end?
If you need temporary/contract, contract-to-hire or direct hire professionals in order to answer this question “yes,” contact Venteon Finance today.