Take the stress out of financial year end

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February 2008

By Tanya Miranda, support director of Softline Pastel

Yes, it’s year end time again and you’re panicking because there’s so much to do between now and 29th February in addition to your already demanding normal daily activities.

So, let’s make it easier for you.

The first thing to do is stop panicking. It’s a simple law of nature that if you’re tense you work more slowly, you’re less able to concentrate, and you forget and lose things. Unclench those hands and that jaw, so that you can get organised.

Then, be methodical.

Start by checking that all your account balances are correct. Work from the largest to the smallest or chronologically or alphabetically, whichever makes most sense to you. But do work in an orderly fashion so that you finish one account before you start another. That will not only eliminate confusion, it will give you a real sense of confidence and achievement as you progress through your list.

It will also allow you to write off the bad debts as you go.

Stock, of course, you can only count on the 29th. So forget about that particular job for now and focus on completing the other year end tasks.

Those include making sure your filing is up to date, that you’ve got all the records you need to substantiate the information in your accounts, and making printouts of anything the auditors may need as supporting evidence of what you’ve posted to various accounts.

On that note, it’s worth deciding now to make next year’s year end even easier by doing three things. The first is to always post the same kind of information to the same journals and always in the same way. This applies particularly when you’re not sure about where to post something to. At least, then, if you need to go back and change where you posted it to, all the information will be in one place and the process of changing it will be both quick and logical. You won’t have to hunt through your books to find different instances of the same information.

The second thing to do to help yourself next year is to make notes to yourself about why you made certain decisions related to the books. Make the notes at the time that you make each decision and write the notes on your monthly printouts of the accounts. That way, if the auditors query your decisions, you don’t have to rely on remembering something that happened months ago.

Thirdly, check your bank recons and your trial balances on a monthly basis rather than waiting for year end to go back and find errors in posting or balances. For instance, you know pretty accurately what expenses go through the books on a monthly basis, so check anomalies as they appear. It’s much easier and quicker correcting them as you spot them than leaving them to the crush of year end.

In other words, do your preparation for year end throughout the year.

Back to this month. Once you’ve got all the details pinned down, make printouts of everything the auditors will need and organise all your documents into four categories: corporate records, staff records, accounting and tax records, and employee benefit plan records.

Then, print out all your year end reports, make two back-ups of your data, and store one back-up away from your office premises. Pastel, for instance, offers an online, off-site backup facility that automates the full backup process and thereby eliminates human error. This provides SMEs access to a solution that is quick, easy and convenient. It’s also a highly cost-effective way to ensure that data is current, secure, and accessible 24 hours a day, anywhere in the world.

It goes without saying, of course, that if you have the right sort of accounting software; all of what we’ve discussed here is going to be that much easier to do – because the software will guide you through the process. Solutions such as Pastel Accounting also give you a thirteenth period that allows you to process March transations even though you haven’t finished off February. It’s inevitable, with bank statements and supplier statements for February reaching you only in March, that you won’t be able to close off your books precisely on the last day of year end. So a thirteenth processing period is a godsend.

In fact, getting the right accounting software might be the most important thing you do for yourself for next year end!

For more information, visit www.pastel.co.za