For small businesses and most especially publicly listed companies, the end of the fiscal year can be nerve-racking. At this time, you will need to accumulate all the financial records for presentation to stockholders and external auditing purposes.
You will often find yourself rummaging through invoices, receipts, each quarter’s profit-related documents, and even records of overheads, from bonuses to the portions of employees’ defined contribution pension plans that you covered. On top of that, you have a couple of deadlines to think about. You need to do many things, but you can avoid unnecessary stress and anxiety if you have had some early planning.
To get your office started, below are some of the things you need to keep in mind:
Collect all your financial statements
Early on, you should reach out to your banks and other financial institutions you have worked with to get copies of financial statements. While some might have been sent to your email, old records from the past quarters may be quite difficult to pull out (especially if there are authorizations required). Once all the necessary documents are in hand, you need to give them to your accountant. While you are at it, prepare the documents directly related to your cash flow and profits.
Check your payables and receivables
Accounts payables and accounts receivables documents are reports that you need to compile as soon as possible. Doing this will help you identify what needs to be paid within the current financial year and what you’re expecting to receive as part of your income within the same period. This will also make sure that the records of settled debts are accurate. You can also decide which of the accounts can be carried over to the next year, especially if you are calculating your tax for the current fiscal year.
Double-check your tax
A fiscal year-end is also about calculating the tax that your company is supposed to pay the government. Ahead of time, you should be already involved in tax planning, so you will find a way to pay the least tax amount possible that is legally allowed. Either you can defer some of your taxes into the next year, or you may make last-minute expenses, such as doing advertising campaigns or buying new equipment; doing the latter will reduce your overall profit, which leads to reduced taxable income.
Plan for the future
While you are preparing the necessary docs for the fiscal year-end, you are gradually getting a picture of your company’s overall financial health. This should give you an idea of what you are supposed to do next year to augment income and minimize losses. If there’s time, meet with your stakeholders to discuss it.
A New Year Awaits
Before your company goes into the new year, there will be a few essential things that need to be settled, and most of them are related to the fiscal year-end. Avoid cramming and hasty, last-minute decisions by preparing early and keeping your records in check.