As the end of the financial year approaches, businesses face a flurry of tasks and responsibilities to ensure a smooth transition into the new fiscal period.
To help navigate this critical period effectively, it’s essential to prioritise specific tasks that can set the stage for financial health and success in the coming year.
Here are 10 essential end-of-financial-year tasks every business should complete:
Reconcile Accounts
Conduct a thorough reconciliation of all financial accounts, including bank statements, credit card transactions, and accounts receivable/payable. Ensure that all entries are accurate and up-to-date to provide a clear picture of the company’s financial position.
Conduct Inventory Audits
Perform a comprehensive audit of inventory levels to account for any discrepancies and identify obsolete or slow-moving stock. Adjust inventory records accordingly to reflect accurate valuations and minimise carrying costs.
Review Financial Reports
Analyse financial statements, including balance sheets, income, and cash flow statements, to assess the company’s financial performance over the past year. Identify trends, areas of concern, and opportunities for improvement.
Assess Tax Obligations
Review tax liabilities and obligations for the financial year, including income tax, GST/VAT, payroll taxes, and other applicable taxes. Ensure compliance with tax laws and regulations and explore opportunities for tax deductions or credits.
Finalise Payroll Processing
Complete payroll processing for the final pay period of the financial year, including calculating wages, salaries, bonuses, and deductions. Issue payment summaries to employees and ensure compliance with relevant employment regulations.
Evaluate Capital Expenditures
Review capital expenditures made during the financial year and assess their impact on the company’s operations and financial performance. Determine the effectiveness of investments and consider future capital allocation strategies.
Settle Outstanding Debts
Address any outstanding debts or liabilities owed by the business, including vendor invoices, loans, and credit card balances. Make necessary payments to avoid penalties and maintain positive relationships with creditors.
Review Budget vs. Actual Performance
Compare actual financial results against the budgeted forecasts to evaluate variances and identify areas of overspending or underperformance. Adjust future budget projections based on insights gained from the review process.
Update Financial Records
Ensure that all financial records, documents, and transactions are accurately recorded and organised for future reference and audit purposes. Implement proper record-keeping practices to maintain compliance and transparency.
Plan for the New Financial Year
Develop a strategic plan and budget for the upcoming financial year based on insights from the review process. Set clear goals, priorities, and initiatives to guide business operations and drive growth and profitability.
By prioritising these essential end-of-financial-year tasks, businesses can ensure compliance, accuracy, and financial stability as they transition into the new fiscal period.
Effective planning and execution of these tasks can lay the groundwork for success and set the stage for achieving business objectives in the year ahead. Need assistance? Why not consult with your trusted business adviser today?