The end of the fiscal year is a really important time for finance teams. Every year, finance professionals get busy sorting through their records to finish up their year-end accounts, statements, and financial reports.
On average, it takes about 25 days for a typical accounting team to wrap up the year. This time also lines up with the end of the month and the end of the quarter, making the workload much heavier and overwhelming for accountants.
One of the easiest ways to make this time less stressful and get more work done is to have a plan and follow it. In this article, we’ve outlined all the important steps to successfully finish the year-end work.
Let’s get into it:
These are simple steps to make sure you close the books on time. Check each one off as you go!
1. Make a closing plan
Figure out the important dates and tasks at need to be done on each date. This includes when reports and data need to be processed, and the final day for closing the fiscal period.
Make a calendar with all the target dates so you don’t forget any important deadlines.
2. Collect any unpaid bills and receipts
You’ll need them to finish the financial records. Make sure your team knows what to provide and give them enough time. There might be delays.
To make things faster, think about using an automation tool that can capture digital receipts. This way, your team can quickly upload their paper receipts.
3. Check what your company owns
Make sure the amount of money in the bank matches the records and fix any mistakes. Look at how much stuff you have in stock and compare it to the records.
Also, check if you’ve paid for things in advance. This helps figure out how much your company’s belongings are worth right now.
4. Reconcile all transactions
Check all your transactions. Make sure the money you wrote down matches what’s on your credit card and bank statements, invoices, and receipts. Be really careful and make sure every penny is accounted for so you’re ready for an audit at the end of the year.
5. Close out accounts receivable and payable
Look at what you got or paid and compare it to what you expected. Make sure all the records of money coming in or going out match what really happened.
If there’s still money that needs sorting, fix the original records with some changes.
6. Accrue accounts receivable
Any receivables owed at the end of the year should be added as credits on the income statement and debits on the balance sheet. Doing so will ensure you start the next fiscal year with the right financials.
7. Accrue accounts payable
Any unpaid debts should be listed as liabilities or accrual expenses on the balance sheet. Keeping track of all your company debts is crucial to managing your finances effectively.
Get a head start on accounting for next year
With our above checklist, you’re off to a great start. And it gets even better with our smart automation dashboard. This helps finance teams close faster, save time year-round, and take financial decision-making to the next level.
Tools like Collect give finance teams greater control and real-time visibility over company budgets, employee spending, and invoicing within a centralized platform. Features like invoice capture and one-click payments enable employees and the finance team to stay on top of expenses, reimbursements, and approvals, instantly.
In a nutshell, the secret to a smoother financial close is to be well-prepared, organized, and proactive with accounting practices throughout the fiscal year.
Schedule a personalized demo on how to automate your financial operations with Collect.