How to Close the Fiscal Year

The conclusion of the final year is undoubtedly among the most crucial periods for the finance department. The preparation of end-of-year accounts, reports, statements, and financial reporting requires finance specialists to spend days digging into the books.

To make things even more demanding, the month-end close and quarter-end reporting are also all around this phase of the year, resulting in dramatically increased workloads and severe overworking for the accounting teams. 

But don’t worry; if you plan things out in advance, prepare a streamlined workflow, and adhere to it when it’s time, it could eradicate stressful situations and boost the overall productivity levels of the individuals involved. 

Year End Accounting Checklist for Small-Medium Businesses

So, here is an effective year end accounting checklist to help you organize the year-end closing cycle so that there are no headaches and last-minute panicking around.

1. Compilation and Analysis of Financial Statements

Financial statements make it easier to comprehend your company’s financial position and, ideally, make things less stressful for your firm during tax season.

All you need to do is access the accounting books that contain the business’s financial records. The accounting records can make it simpler to gather and review financial statements, including income statements, cash-flow statements, and balance sheets.

2. Maintaining a Closing Calendar

Determine the crucial dates and tasks that must be accomplished on each. These include the dates for reporting, data analysis, and fiscal closing. So plan out a schedule to conveniently track and complete every process.

3. Collecting Past Due Invoices and Receipts

These are essential for closing the books. Make sure personnel are aware of the requirements and give them enough time to complete their paperwork. Plan on delays.

You can also employ an automation tool that offers digital receipt capturing to hasten this procedure by allowing staff to submit their physical expenditure receipts instantaneously.

4. Consolidating All Transactions

It’s absolutely crucial to ensure that your transaction records correspond to that on your bank and card statements, invoices, and receipts. Make sure to account for every dollar so that it’s smoother to pass through an audit at the year-end.

5. Accounting for Inventory

Before the year-end, conduct an inventory inspection to see if the company has any stock. Then, compare the balance sheet’s inventory totals to it. Make amendments if any anomalies are spotted between the count and balance sheet.

6. Reviewing Accounts Payable and Receivable

Compare any payments or receipts to the accrued amount. You must ensure that any records of cash entering or leaving the company correspond to what transpired. 

Further, compare adjusting entries to the initial journal entries in case there’s a balance due.

7. Adjusting Entitlements and Incentives

Ideally, you should be accounting for all grants, incentives, or entitlements received during the fiscal year as authorized. Along with private handouts, these may also involve contributions from the government or tax breaks.

8. Data Backup is Vital

Backing up data for the year-end closing checklist is necessary so that you can store valuable financial reporting data safely for the coming year. Have a reliable backup mechanism in place to guarantee the safety of the data.

Conclusion

The above-mentioned year end accounting checklist items are significantly helpful in ensuring a smooth, steady, and streamlined closing for the fiscal year. So, remember to tick off every box on the list and keep the business finances up-to-date. 

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