5 tips for an easy accounting annual closing
This week I'm digging into the five things you should do so that your accounting annual closing is fast, correct and easy to do.
1. Plan your inventory with your last delivery
At some point at the end of December, you will do your last delivery. It could be a physical delivery, right before Christmas to make sure that the goods arrive on time for it or it could be a service hand-over delivery with confirmation of the customer. In any way, at some point, you already know that you are not working anymore in 2018.
Plan your inventory right after that point but before the 31.12.2018. Do it. Put the report in the closing folder and you're good to go. That part of the accounting closing process will be easy and fast.
If you're not sure what to put in the inventory list, open an Excel file or a Google table and add the following columns:
- 1Product number
- 2Product name
- 3Last purchase price
- 4Number of an item in stock
At the end of the list, make a place to sign for the two persons who are counting it. Probably you and a friend.
Do not forget to put the date somewhere of the date you counted it.
By doing so, you make sure that the stock in your balance sheet is easily accounted for.
2. Invoice all your 2018 deliveries in 2018.
I know this one sounds very obvious but it is a common mistake to not fully invoice everything which has happened in 2018 in 2018.
If you sell goods, make sure that you all the goods you delivered are invoiced.
If you sell services, invoice everything you've finished in 2018.
By doing so, you decrease the number of accruals and deferrals you or your accountant will have to do at the accounting annual closing.
3. Pay all the open bills you received
I highly recommend you to check and pay all the bills you received in 2018 in 2018.
Do not forget, the 31st is a close bank day in Switzerland and a payment takes around 2 days to be wired. So pay everything the 28th at the latest!
By paying all your bills of 2018 in 2018, you make sure that you don't need to book accruals and deferrals about it at closing.
3b. Do not pay 2019 bills in 2018 if you can
If you can, do not pay bills which are linked to 2019 in 2018. For example, bills for insurance on the period 2019 sent to you in December. Pay them in January.
Keep them on your desk and pay them after the 2nf of January (the 1st is a bank holiday).
Each one will make you save two accruals and deferrals.
4. Stop ordering goods before the 15th of December if you can
The target here is to decrease the risk to receive a bill in January concerning a delivery you received in 2018.
If you make sure that all your delivery are received before the 15th of December, there is no reason for a supplier to wait more than two weeks to send you a bill.
By doing so, you decrease the number of accruals and deferrals in your closing.
5. Pay all December salaries on the 20th.
This one seems obvious but there are so many bank holidays at the end of December (25th, 26th, 31th) that it can be easy to miss the right time to make the payments. Furthermore, it's easy to forget making payments for your business when you are all caught up in family festivities.
My recommendation is to pay all the salaries on the 20th of December, it's also nice for your employees to receive their salaries before Christmas so that the can do some extra shopping if needed.
With this last one, you save accruals and deferrals.
Finally, all these tips are to make your business accounting annual closing easier, faster and more streamlined. You don't have to do them but it will go a long way making the accounting closing process cost-effective.
Do you have other tips on how to prepare for the accounting annual closing? please write a comment below, I'll make sure to check it out and integrate all good ideas in next year article.
Are you looking for a way to do your closing quickly and easily? Try EZYcount, the EZYcount team is there to support you during local events in January to help you make your annual accounting closing. Furthermore, the EZYcount team is always there to support you.