Whether your company’s fiscal year-end is in June or December, although you may be dreading it, it is essential to prepare. It’s a busy time of the year but also the best time to organize your accounting information, count inventory and overall clean up any loose ends around the business. Without proper software like Blue Links Accounting & Inventory ERP solution, your books may not be in order and you may be working with manual processes that require quite a bit of human involvement and thus errors. With ERP software, you can be assured that your data is stored cleanly and any reports you need during year-end are easily accessible. We’ll outline essential activities for performing year-end no matter what accounting ERP software you’re using.
- Backup Existing Data
- Generate Reports
- Reconciling your Accounts
- Inventory Count
Backup Existing Data
Whether you’re using Blue Link ERP or any other all-in-one solution, backing up your data before performing the year-end procedures is necessary in case there are any issues with the process. Blue Link backs up data on a nightly basis so if the year-end process will be running first thing in the morning, then last night’s backup may be all you need. If not, you will want to force the backup to run at a time that benefits you. Don’t forget to test the backup to ensure it has run successfully and the data is useable. The last thing we want to do is lose any valuable data from previous years that can help you make better business decisions today.
During your fiscal year-end, it’s important that you know the correct numbers for all your accounts. Make sure you generate and save any important reports before you post new transactions into the next fiscal year so you can review them with the correct numbers. With the information in these reports you can set new and more accurate goals and it will help with budgeting for the next year.
Reconciling your Accounts
A primary part of accounting year-end procedures is reconciling all your accounts specifically with the bank, accounts payable and accounts receivable. The purpose of reconciling your accounts is to ensure that the actual amount of money spent matches the amount shown leaving an account. Your accountant should compare your bank and account statements to your balance sheet to ensure they match. You can then use this information to help you gain insight into how the business is doing in terms of cash flow.
When it comes to accounting for inventory during year-end – you need the real numbers to get an accurate view of your inventory. In order to assign the right dollar value to the inventory items, you should’ve selected and have been using a costing method that best suits the flow of your warehouse. The two most commonly used and accepted inventory costing methods are FIFO and Average Cost.
Doing an inventory check at year-end not only ensures your accounting information is correct but it also helps you plan for next year by giving you the information to determine how much you spent on inventory and its value.
Year-end is perfect for taking the time to ensure all areas of your business are ready for the next year. Ensure employee data is up to date as well as company information. File and store all documents where you can easily find them. With security breaches being a risk, think about electronic document management where your files are safely secured in a paperless environment. Blue Link’s all-in-one accounting software includes complete two-way integration with DocuWare – an electronic document management system.
Bonus tip: If you’ve implemented your software in recent years, you may have had the option of choosing between Cloud and On-Premises solutions. If you choose Cloud, you’re in luck. You can benefit from choosing a cloud solution because once the fiscal year-end comes around you will receive real-time updates and reporting from anywhere. You are able to access your most up-to-date data whenever you want which means that none of your regular business activities need to stop just because you are running year-end activities!
If you’re a small business owner check out our guide on beneficial reporting tools to help you take control of your data.