Having trouble closing your accounts from the previous fiscal year? The new year is undoubtedly the perfect opportunity to reorganize your company’s accounts and ensure a successful start. By following a well-structured checklist , you can optimize processes, review expenses, and plan your business growth with confidence.
For organizations, especially small and medium-sized enterprises (SMEs), reviewing and re-evaluating the 12 months of the fiscal year is an essential process to ensure their financial health.
Above all, annual financial reassessment and fiscal year planning will strengthen your competitiveness in the market.
From reviewing financial reports to updating accounting systems, the strategies we suggest in this article will simplify management in the new year.
What is a fiscal year?
There is still some confusion between the terms ” fiscal year” and “calendar year . ” Although both have 12 months, the calendar year has a fixed duration, that is, it begins on January 1st and ends on December 31st, having 365 (or 366) days.
The fiscal year period can be chosen by the company, that is, it is not mandatory to coincide with the calendar year, including only 360 days (in accounting terms, each month has 30 days).
Essential checklist for financial organization of the fiscal year
Closing accounts at the end of the fiscal year allows companies to perform an in-depth assessment of their financial performance, which will facilitate the necessary accounting adjustments and strategic planning for the following year.
To succeed in this crucial assessment, you must undoubtedly adopt a structured approach. Only then will you be able to identify critical areas and optimize processes.
So, carefully follow these vital steps to start the new tax season on the right foot.
1. Review the previous year’s financial reports
Analyzing financial reports will certainly provide essential information about the company’s performance. These reports help, above all, to understand:
- Where resources were allocated;
- Which areas exceeded or fell short of forecasts;
- The risks to be mitigated or resolved.
A careful review of fiscal year expenses and revenues allows you to identify inefficiencies, such as unnecessary spending and accounting errors.
The preparation of these reports also makes it possible to present the company’s financial health to shareholders and the market with clarity and transparency .
2. Renew the business budget
A well-designed budget is undeniably the foundation for an organization’s financial sustainability throughout the fiscal year. Therefore, you should update your budget to align revenues and expenses with the company’s strategic objectives.
When reviewing your budget, consider, above all, the following:
- Expenses you can reduce or eliminate;
- Predictable revenue, taking into account unforeseen events, seasonal variations or market trends;
- Investment possibilities.
In short, for proper fiscal year management, the company must ensure a robust working capital that safeguards both regular and unexpected expenses.
3. Ensure compliance with tax obligations
A company’s legal compliance undoubtedly has a direct impact on its image among partners and customers.
Therefore, organizations should pay attention to the main deadlines in the fiscal calendar, namely the dates of:
- Submission of tax returns;
- Payment of taxes (e.g., corporate income tax and VAT);
- Updating data with tax authorities.
Furthermore, analyzing annual tax obligations allows you to identify applicable tax deductions or incentives, and is also the ideal time to correct errors and avoid future problems.
4. Conduct the audit of accounting processes
Conducting an internal audit at the beginning of the year plays a key role in ensuring the accuracy and compliance of accounts. In fact, it’s recommended that this process be performed at least once a year.
In addition to identifying inconsistencies or errors, conducting regular audits promotes security and trust among the organization’s partners.
Finally, a well-conducted audit:
- Minimizes risks in accounting management at the beginning of the year;
- Prepares the company for possible external inspections.
5. Update accounting tools and software
With the acceleration of business digitalization, efficiency in accounting management increasingly depends on the use of updated and appropriate tools.
In fact, an outdated system poses not only risks to data security, but also a greater likelihood of errors.
In this way, updating accounting tools ensures:
- Greater efficiency in data management;
- Compliance with new rules;
- Integration of modern features such as artificial intelligence (AI).