[PODCAST] Basic tips for closing your accounts correctly
Posted: Wed Dec 18, 2024 8:31 am
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In this episode of the Sage Advice Podcast, “Business management as the key to success” , Joan Boluda explains the basic tips for performing the accounting closing correctly. Listen to us!
Closing the year well is not like closing a door. It requires a process that will take some time.
Our goal is to file djibouti email list accounts, which most companies do before the end of July.
Although we are just finishing the year, we still have a lot of work to do. To do so, here are our tips for closing the accounts correctly.
Have good documentary support to perform the accounting closing
The first is to have good documentary support for our accounting decisions for closing the financial year . Behind each of the closing operations , there must be a justification based on following the principles and criteria established by the regulations.
We can see this clearly with stocks. When the year-end comes, we must adjust stocks. This work has a more visible part. We will have made some entries in the journal reflecting the change in stocks. As a result, the updated balances will appear in the balance sheet and we will see the corresponding income or expense in the profit and loss account.
However, this involves less visible work, but on which the smooth running of the process depends. All stocks must be under control . We will see what types we have (all those that can be considered interchangeable with each other). Next, we will control the prices at which the different batches have been acquired in order to apply a method to assign value to them (weighted average price or FIFO, normally).
Keep and organize invoices
Therefore, we must keep and organize the invoices in order to be able to do all this work. And, if we have produced the stock ourselves, we must have all the documents that allow us to calculate the cost. In addition, we must verify that the stock is still in our possession (there have been no losses, leaks, thefts, misplacements, incorrectly accounted outputs, etc.). Without a good inventory, it will be impossible to carry out this work correctly.
This same philosophy of documentary support is applicable to many other fields . For example, the same thing will happen when we try to examine whether it is appropriate to record a provision or a correction for impairment. The entry is very simple and its reflection in the accounts is very clear, but the decision must be supported by data.
Information systems that facilitate accounting closing
If we want to have a good accounting closing, it is necessary to have well-organized information systems . For years, this has been done through computer solutions; we no longer live in the era of ink and paper.
And what do we ask of our accounting and invoicing solution to facilitate closing? Basically, three wishes:
Keep it simple
There will be little use in having a powerful tool to manage the information we need for closing if no one understands it. Its use must be intuitive and designed for businesses of our size and sector.
That centralizes the information
The second wish is to centralize as much information as possible, so that everything we need for the closing has a single 'home'. Closing is very cumbersome when some of the documents are on paper, others on a USB stick, others on a hard drive... Nowadays , the most practical thing is for that 'home' to be the cloud , since it is accessible from any location with an internet connection, at any time, and it facilitates collaboration.
Let it be a comprehensive solution
It is of little use to be able to keep accounts in it if we do not have payrolls, invoices, bank and treasury documents, etc., at our disposal.
Subscribe
In this episode of the Sage Advice Podcast, “Business management as the key to success” , Joan Boluda explains the basic tips for performing the accounting closing correctly. Listen to us!
Closing the year well is not like closing a door. It requires a process that will take some time.
Our goal is to file djibouti email list accounts, which most companies do before the end of July.
Although we are just finishing the year, we still have a lot of work to do. To do so, here are our tips for closing the accounts correctly.
Have good documentary support to perform the accounting closing
The first is to have good documentary support for our accounting decisions for closing the financial year . Behind each of the closing operations , there must be a justification based on following the principles and criteria established by the regulations.
We can see this clearly with stocks. When the year-end comes, we must adjust stocks. This work has a more visible part. We will have made some entries in the journal reflecting the change in stocks. As a result, the updated balances will appear in the balance sheet and we will see the corresponding income or expense in the profit and loss account.
However, this involves less visible work, but on which the smooth running of the process depends. All stocks must be under control . We will see what types we have (all those that can be considered interchangeable with each other). Next, we will control the prices at which the different batches have been acquired in order to apply a method to assign value to them (weighted average price or FIFO, normally).
Keep and organize invoices
Therefore, we must keep and organize the invoices in order to be able to do all this work. And, if we have produced the stock ourselves, we must have all the documents that allow us to calculate the cost. In addition, we must verify that the stock is still in our possession (there have been no losses, leaks, thefts, misplacements, incorrectly accounted outputs, etc.). Without a good inventory, it will be impossible to carry out this work correctly.
This same philosophy of documentary support is applicable to many other fields . For example, the same thing will happen when we try to examine whether it is appropriate to record a provision or a correction for impairment. The entry is very simple and its reflection in the accounts is very clear, but the decision must be supported by data.
Information systems that facilitate accounting closing
If we want to have a good accounting closing, it is necessary to have well-organized information systems . For years, this has been done through computer solutions; we no longer live in the era of ink and paper.
And what do we ask of our accounting and invoicing solution to facilitate closing? Basically, three wishes:
Keep it simple
There will be little use in having a powerful tool to manage the information we need for closing if no one understands it. Its use must be intuitive and designed for businesses of our size and sector.
That centralizes the information
The second wish is to centralize as much information as possible, so that everything we need for the closing has a single 'home'. Closing is very cumbersome when some of the documents are on paper, others on a USB stick, others on a hard drive... Nowadays , the most practical thing is for that 'home' to be the cloud , since it is accessible from any location with an internet connection, at any time, and it facilitates collaboration.
Let it be a comprehensive solution
It is of little use to be able to keep accounts in it if we do not have payrolls, invoices, bank and treasury documents, etc., at our disposal.