Before going to the details of Financial Reporting details, lets discuss about the Accounting . Accounting is the most crucial, or you can also say nerve-wracking & mentally draining task! Anyone working on a finance team will know how stressful accounting durations are. There are a ton of
- Last-minute requests,
- Unpredictable delays, and
- Unexpected bottlenecks occur in the finances while maintaining the highest quality and compliance standards.
The essential process of all the financial procedures is month-end or year-end financial reporting. Punctual and complete financial statements are the most effective and strategic tools for any business.
Every accountant is aware that financial reporting is an essential process. It helps business owners analyze and estimate the progress towards the desired goals.
Month-end or year-end financial reporting is essential for achieving an accurate cash flow projection for the future and creating business decisions.
To understand better, read the article as we will give you the key consideration for month-end or year-end financial reporting.
Before getting into the key consideration of financial reporting, let us learn:
What is month-end or year-end financial reporting?
The month-end or year-end financial reporting of an organization is a closing process. It is a set of steps that include closing the books at the end of every month or year after a complete evaluation of finances. The process ensures the finances are accurate, reliable, and stable.
If not recording invoices/bills on a timely basis, or if someone changes transactions from previous months or even previous years, it is hard to track the performance accurately.
The key consideration for month-end or year-end financial reporting
Here are some of the key considerations that will help organizations in their month-end or year-end financial reporting
1) Gather information
Gathering information is an essential part of financial reporting. Collect all the data matters regarding the accounting period in question:
- Income statement accounts
- General ledger
- Inventory count
- Accrued expenses
It is a best practice to have a record of daily operational transactions;
ideally, the moment they are made instead of waiting until the end of the month of the year.
2) Automate the closing process
Automation is an effective way to improve the closing books process. It is essential for financial reporting every month-end or year-end. Automation removes the common pain points. Modern, cloud-based SaaS solutions enable accountants to add more value to the accounting processes instead of manually diagnosing errors. There are many benefits of cloud-based accounting.
With the right automation and customizations, the finance team will automatically collect transaction data in real-time & they can also access the automatically generated reports that may hint at potentially fraudulent or suspicious payment activity.
3) Reconcile Accounts
The essential step of closing books is reconciling all the accounts. Accountants must cross-check the account statements with the bank forms, receipts, and other outside entries. The first thing the business owner can do is reconcile the cash accounts. It is easier to process since differences and mistakes are evident when dealing with cash. This step of reconciling aware the business owner about how much finance he has on hand as a business.
From there, they can reconcile the balance sheets.
4) Perform each step in the process
Month-end or year-end financial reporting is an excellent opportunity to test new methods and
workflows. A month-end or year-end is a predictable process & it should run like a well-oiled machine, with tight schedules in a precise series.
Our accounting team at RVG Chartered Accountants reviews the month-end or year-end financial reporting to develop a list of tasks to ensure your business runs smoothly and correctly, follows best practices, and uses the available software tools. This article intends to help you
jump-start the journey. Our best account experts will create accurate month-end or year-end financial reporting. So, what are you waiting for,
Consult us today for the best services.
Also Read Best Ways to Conduct Physical Inventory