Fiscal Year-End Closing Financial Checklist
What Is Year-End Close?This is also known as “closing the books”, when organizations inspect and update their accounting records at the end of the year. This is the critical final step in the company’s annual financial reporting process. It identifies any balances or deficits on the company books which are then carried over into the new fiscal year. This helps create more realistic budgets based on what was spent the previous year. The primary goal is to maintain strong financial health and provide visibility into all the profits and losses of the business.
Ways To Simplify Annual ClosingOne of the easiest ways to reduce the workload and stress of the year-end closing is to:
Prepare & Automate
PREPAREPlanning ahead can make all the difference in the world. The entire closing process can be simplified by performing pre-close activities throughout the year.
Top 10 Year-End Closing Checklist
1. Assign Individual ResponsibilitiesConfirm each team member’s responsibilities way in advance so that everyone knows precisely for what they are accountable. Make this checklist visible to all finance team members.
2. Gather & Analyze Financial StatementsThis includes your Income Statement, Cash Flow Statement & Balance Sheet.
3. Collect Past Due InvoicesConfirm all customers have been invoiced & their debt collected. Sometimes clients just need a friendly reminder that they owe you money. Always work to collect what is owed your business.
4. Update InventoryYou must get an accurate count of the materials and supplies you have on hand. Otherwise, this will cost you money in the form of expired goods or empty shelves.
5. Compile ReceiptsMatch your bank & credit card statements with receipts. An accounting software solution will let you automate this process throughout the entire year.
6. Complete Monthly & Quarterly ReconciliationsThis will reduce the amount of time it takes to confirm accounts are accurate.
7. Review Accounts Payable & ReceivableThis will ensure you settle all debts and collections before year-end.
8. Verify Employee & Contractor InfoMake sure you have all the correct forms and information on file to ensure W-2’s and 1099’s will go to the proper place.
9. Educate Team of Current Tax Laws & RegulationsYou don’t want to have to add this to your list of critical to-do’s come December when your team is already overloaded with responsibilities.
10. Back Up DataWhile this should be an ongoing process, make sure all of your software programs have been backed up successfully.
AUTOMATEIf you don’t already have a financial reporting software solution in place, make that a top priority so that beginning in 2023 you can automate and simplify, not only your annual close, but every financial decision necessary to successfully operate and grow your organization. A leading technology solution will give your finance teams greater control and real-time visibility into the financial health of the company. It will save them time, money and resources, along with ensuring complete confidence in their data to make the very best decisions.
Jeana has been in the software industry for 15+ years specializing in ERP reporting solutions. She has decades of experience in creative content development and marketing and enjoys exercising, traveling & spending time with her husband & twin boys.