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Year-end Checklist – Every Accountant's Love-hate Relationship

It’s no secret that there is a love-hate relationship between the end of year and the accountants. On one side they are thrilled to celebrate the end of year festivities but on the other hand they are traumatised with the work load and endless issues which they have to face in the same period. In a nutshell in the morning it’s full-blow war, in the evening it’s a great celebration.


Will this ever change? Dreaming of it would be illusional, but yet with the right planning and right software tools we an ease off some of the pressure which is encountered.


First of all we need to bust the myth that all procedures should be ready by end of year. In a similar way that the end of month doesn’t has to be concluded on the last day of the month, likewise the end of year. Having said that this statement is highly subjective depending on the industry you’re working on. A stock-trading company may have a harder to crack than other industries.

So why the hassle? The issue lies in two areas:

  • Reporting functions and reconciliations

  • Closure of the income statement books



Reporting functions and reconciliations


Let us start off with the reporting functions. Traditionally, a number of accounting software lacked the option to go back in time and capture the picture at that specific moment. This lead to the stressful feat of producing all the required reports from the system before kick-starting the new year transactions. In most cases this is no longer the case today however we cannot take it for granted. The best way to ensure this is to produce all the reports as at a certain point in time before end of year to put our mind at rest that these same reports can be produced at any point in time. It’s vital to keep the auditors in the loop as they are the ones who will be chasing us for the reports and us, the clients, who have to produce them at all costs.

The second part is the closure of the income statement books. Needless to say that this is may be harder as due to the holidays and the delays in practically all areas of the businesses the information tend to arrive later rather than sooner. However, the stressful part used to be the, once again, old presumption that the new year transactions may not start before closing the current one. In most accounting software this is no longer the case. Moreover, some software actually allows us to produce an end of year run multiple times, pretty convenient when we are to pass the audit adjustments later on in the year.

Whilst the above is crucial in the long-term, however for those who may not have such a sophisticated system, a change in software in a couple of weeks is not at option at all. So we thought of coming up with a check-list which at least can ease off some of the planning.


Reconciliation

End of year is big on reconciliations. Top of the list are the classic three reconciliations:

  • Account Receivables - Sending out statements, whilst hoping that some of the amount dues get settled.

  • Account Payables - Chase for the balance amount due and the due date

  • Bank Account Statements - once posting all the bank entries run a Bank Reconciliation to ensure that the data is correct.


Planning

This may not be the right time to start planning and budgeting but it’s always important to ensure that all the plans that the different departments of the businesses have conducted are sent over to the accounting team. They will turn to be very useful in the coming months.


Taxes

For the lucky ones having a tax team this may not be at the top list, however, we would still need to ensure that the following are recorded:

  • TAX Payments processed to the government

  • Tax amount due

  • HR-Related Taxes which have been paid

  • HR-Related taxes still due at year-end


Stock

In line to the best-practice a stock-take is necessary. A stock-take can take different forms but in any case the crucial point is that the stock has been counted off minimum once a year during the accounting period.


Reporting

In line to the opening points of this article, we need to make sure that the standard accounting reports are produced. The key ones are:

  • Statement of Comprehensive Income

  • Statement of Financial Position

  • Cash Flow Statement




We may have been a tat too positive over here, probably it’s the Christmas spirit, however old ideas are to be revisited. The process will always be very time-consuming and at time stressful, however with the right accounting software we believe that the love-hate relationship can turn into a more Christmassy one 😊



 

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