Here are some, but not all, key year-end activities:
- Account Reconciliation – Speed and accuracy define the primary objectives in this process. Companies can be faced with potential obstacles when executing this key activity.
- Are you able to accelerate your process to meet tight deadlines?
- Will your process avoid large dollar surprises at year-end?
- Will all causes for exceptions be identified?
- External Financial Reporting – Increased complexity resulting from new disclosure requirements, new accounting guidance and the never yielding deadline makes timely and accurate financial reporting one of a company's biggest challenges.
- Have checklists been updated to ensure the capture of new technical guidance and schedule requirements?
- Have potential material financial statement exposures been identified and mitigated?
- Does your closing process ensure an adequate amount of time for review and analysis of financial statements prior to issuance?
- Internal and Management Reporting – The needs of company management, executives and boards cannot be overlooked during the frenetic year-end process.
- Is your finance function prepared to address the concerns and reporting needs of management?
- Does managerial and operational reporting flow appropriately from normal closing activities?
- Are the reports decisional, actionable, and presented in a way that makes sense to all who use them?
- Budgeting, Forecasting and Analysis – Year-end requirements do not relieve organizations of the need for operational analysis and adequate financial planning for the coming year.
- Are my budgets complete and ready for use immediately upon completion of year-end tasks?
- Has adequate analysis been performed of all key accounts to ensure an effective close?
- Are plans in place to efficiently respond to audit requests to help mitigate wasted time (and possibly decrease audit fees)?
- Physical Inventory Assistance – Inventory may represent a company's largest asset. Year-end observations must be well managed and effectively performed.
- Has the inventory process been scheduled and coordinated with other year-end activities?
- Have teams been developed and assigned?
- Are procedures for conducting the physical inventory well documented for both your inventory team and auditors?
- Technical Accounting – Accounting standard setters and regulatory bodies continue to promulgate new guidance in accounting and reporting. Year-end is the time to pay close attention to those new standards which may impact your organization.
- Are you positioned to address all technical accounting issues affecting your financials (SEC, FASB, IASB, other)?
- Do you feel confident you are aware of all the technical accounting issues that will need to be addressed to ensure compliance?
- Do you feel confident you are aware of all the disclosure requirements that will need to be completed to ensure compliance?
All companies experience, at different levels, the demands of year-end requirements. It is critical to make sure that your year-end process is stable, that it considers the needs of all stakeholders, and that you have the tools and personnel necessary to meet these requirements.
For more information, contact Rebecca Albarelli.