Fiscal Year - Surviving Your Business Year EndJuly 22 2014, 0 Comments
Daily processes can sometimes seem daunting enough but at some point you will need to draw a line underneath this year's figures and start afresh, or at the very least with opening balances! And this article will give you a great head start and I hope will leave you with the message that it's probably not as hard as you think.
So, what to do when that brown envelope drops on your doormat with the inevitable message? We've all received one; it contains reminders about your year end and that the time has come to submit your figures. There it is, your unique identity number and probably the letter will mention something about your legal requirements too and any penalties for late submission etc., etc.
Fiscal year ends are comparatively easy to do with our business accounting software package. We take the form of a fixed sequence of instructions and the software will do the rest for you. Strangely enough at the exact date of your Year End you will in some cases not have to do anything, that is, for a little while. This is because you will very likely need to let all your bills, statements and so on come in. It is only then that you will be able to act.
Once you have acquired all of these documents you will be able to commence your Year End procedure. You may finalise this manually and for a very small business that might be quite straightforward. However, using our accounting software package you can run a process to complete your fiscal year and the program will do it all for you including your new year's opening balances.
The main thing to ensure is that every activity that your business has done is recorded clearly in the books, together with all the relevant receipts and so on of course. It may be that you also need to show asset depreciation. When it comes to depreciation in a nutshell what you need to know is that the depreciation of any assets will need to be accounted for so that your business value is shown as accurately as possible in your accounts.
Your accountant will be the best person to check over your figures (and your asset depreciation calculations of course!) for you. In fact you will find that your accountant's final bill will need to be factored in to your figures too. So what is commonly done is that the accountant will add in an 'Accrual' which is really only a sum (usually an estimate) into the year's expenses.
In short at the end of a fiscal year you will need to do some 'housekeeping' no matter which way you look at it. It's a legal requirement and actually will help you too as it will focus your mind on how the business has fared this year. It provides a useful window for you to do some analysis. What needs to be continued next year? What should your business stop doing? What worked really well this year?
Once you have completed your fiscal year end it's onwards and upwards!