Here's my annual tip: When is the most important time for your entity to start thinking about year’s end? Now, and all year long!
The end of the year is a busy time for companies, accounting-wise. To be effectively prepared, your business or organization needs to start getting ready long before then. A little planning goes a long way toward avoiding the last-minute scramble that some companies have in finalizing their annual accounting records.
Early on, you should meet with your accountant and review the process of getting to the ultimate goal each year: having financial statements and any other tax-related records complete and ready for review and use by your organization’s management team and tax preparer. From month to month, you are used to keeping a focus on things like accounts payable, accounts receivable, and cash flow. But for some entities, year’s end brings additional issues such as inventory valuation and fixed asset depreciation that may not be high on your radar. For nonprofits, audit preparation becomes important.
Bottom line: make sure that occasionally throughout the year, you and your accountant look ahead and anticipate any possible year-end matters. If you have any questions on dealing with your year-end accounting issues, just give me a call. —Beth (Reynolds) Marsh, CEO