Some companies take what feels like an eternity to prepare their annual financial statements. Other companies have prepared their annual financial statements one month after the balance sheet date – often also certified by the auditor. The “fast close”, i.e., the rapid preparation and – if necessary – the audit of the annual financial statements, provides stakeholders with timely information on the company’s assets, financial and earnings situation. Whether banks, suppliers, or management – up-to-date reporting is a competitive advantage and thus a real SME issue. How do you achieve high speed for your annual financial statement?
The principle says: Annual Financial Statements are always!
The early preparation of annual financial statements needs both: speed and quality! This requires clarity in the accounting processes. How does the relevant information for posting, accounting and valuation get to the right place? What measures do you take to optimize the runtimes of your documents? And who do you entrust with forwarding the relevant information? In accounting, the scope of processing for monthly or quarterly financial statements must be defined. The closer this comes to the usual scope for annual financial statements, the “closer” the accounting is to the financial statements – and the path to the final annual financial statements is no longer far. The scope varies from company to company. The valuation of assets and liabilities is of particular importance. Here, too, you should develop a clear concept of how the processes, especially for provisions, depreciation, and value adjustments, should be designed. For the fast close, your tax advisor and, if applicable, your auditor needs to be involved at an early stage so that they can fix the necessary dates for their work.
“Stupid bookkeeping – my tax advisor does it!”
Many companies have their accounting done by accounting firms or by their tax advisor’s office. The same applies to this collaboration as to an in-house accounting system. You should not settle for a possible “we always do it this way”, but clearly address your requirements in order to achieve your goal of a fast close. It is your accounting system and must provide the information you need to manage your business.
The success will show in the next year!
The necessary adjustments need a certain lead time. If you have the feeling that the preparation of the current annual accounts is not going well, this is an opportunity to think about changes so that the next accounts run smoothly and are ready one month after the balance sheet date.
THE MAK’ED TEAM has long been involved in the establishment of professional accounting in medium-sized companies, but also in the restructuring and reorganization of accounting. We do not evaluate your work in the past but change the processes and determinations with you in order to establish a fast and high-quality accounting system. A possible process would be:
- Review of the accounting system and its processes
- Understanding the situation of the company and its challenges
- Drawing up an analysis of weaknesses and a catalogue of measures to be taken
- Proposals for change, possibly involving digital tools
- Mapping the interface with tax advisors and auditors
- Defining the changes
- Implementing the changes