Every business owner needs to close their books as fast as possible. When closing books and getting ready for the end of the fiscal year, it is important to compile a checklist to review and reconcile financial health to guarantee everything is accurate and that it correctly reflects your business’s financial health.
What is closing a fiscal year? By closing out the fiscal year, you check your finances from the previous year to prepare you for the upcoming business year. We understand it may be difficult to find footing even to begin with, so we have created this quick checklist to make closing out this fiscal year easier.
Check for Errors in Your Transactions
Before you start closing out the fiscal year, it is important to be confident that the balances in your records and bank statements match. This is also known as account reconciliation.
Reconcile Accounts
More on account reconciliation it is when external and internal records match your finances. This might involve comparing bank statements, credit card statements, or other external financial documents with internal records, such as your accounting software or ledger.
Inventory Management
The process of keeping, ordering, and selling products and services is known as inventory management. Your fiscal records need to keep track of the inventory you have bought throughout the year.
Budgeting and Planning
Not all finance companies are created equal. At a time when you need to be minding every penny that goes out of your business, take a look at rates and fees that your banking partners are charging. It may be the time to make some changes as finding the right financing can mean the difference between generating profits or enduring losses. A reputable lender that understands your business inside and out could be just the partner to help get you through this period of higher costs.
Analyze Cash Flow
For the fiscal year, cash flow analysis is an important part of your checklist since it provides funds, helps with financial planning, and allows well-informed decision-making.
Archive Records
Archive records are essential to the fiscal year because they offer historical data to support financial audits, regulatory compliance, and future strategic planning. They also guarantee accountability and transparency in business operations.
Financial Reporting:
This is when you gather and record financial data, prepare and reconcile financial statements, ensure compliance, share reports with stakeholders, and use the information to make informed business decisions.
Conclusion:
Knowing your financial situation thoroughly will help you make the right strategic decisions for your business. Closing out one fiscal year before starting the other can help your company invest, save costs, and expand to set up for upcoming success.
In short, closing out the fiscal year is not a chore. This quick but necessary checklist helps your business’s financial health, compliance, and readiness for future growth.
