The fiscal year-end is the conclusion of a 12-month accounting cycle. A fiscal year can be the same as a calendar year, from January to December, or it can begin and end at any time, based on the company’s needs.
All public companies are required to publish financial statements at the end of their fiscal year that give investors an update on the company, an analysis of current year to previous years, and details of the business operation. These statements are also reviewed by the Securities and Exchange Commission.
The top three things you can do to prepare for the fiscal year-end are to plan ahead, gather receipts, and share information with stockholders.
Whatever the size of your business, the best way to prepare for the end of the fiscal year is to keep precise, up-to-date accounting records throughout the year. Most large corporations are required to do so and will have auditors that periodically review their finances to look for irregularities.
Even if you’re new to running your own business, it’s a best practice to keep your accounts payable and accounts receivable current. Keep all receipts for purchases and a record of checks used to pay creditors. Whether you use a cash or accrual method of accounting, you need accurate numbers to keep the system running smoothly. This is also a good time to look at how much you’re spending in each area of your business. Ask questions about what you’re paying for supplies, raw materials, employee benefits, salaries, etc. You may find areas for savings and opportunities to grow the business’ bottom line.
2. Plan for Year End
Don’t let the year-end sneak up on you. It happens every year at the same time. Plan it into your company’s business plan. Remind managers and department heads to check the accounting records for their business unit periodically to make sure everything is on track. This will make year-end financial reports easier for everyone involved.
3. Communicate with Shareholders
As you prepare year-end statements, you should reflect on the accomplishments from the past 12 months, identify areas for improvement, and set new goals for the coming year. Communicate this information to key stakeholders, including your employees.
ORT Consulting can assist you in setting up your business, determining the fiscal year that best works for your industry, and can provide the services you’ll need all year long to keep your business running smoothly. Contact ORT Consulting online at www.ortconsulting.com or call our experts today at 773-637-8802.