As the holidays are here, now is the time to start planning for year-end processes and needs. From an accounting perspective, the year end process starts early and ends after December is closed – which could be anywhere from January 1 to January 31 and beyond. Reviewing your year, however, is not just closing the books. Below is a list of 11 suggested items you may wish to consider. Remember there may be additional items to close, review, all based on your firm and your needs.
1. Review Work In Process
a. Write off or clear any WIP not to be carried over to the new year.
b. Doing this prior to closing the financial year to keep the new year positive.
2. Review Accounts Receivable
a. Are there any invoices or items to be corrected or written off?
b. Complete the review before closing the financial year – keep the year moving forward on a positive note.
3. Close the year – financial tasks to complete
a. Get those timesheets completed ASAP.
b. Get any final invoices for the year final printed and out to the client.
c. Enter all expenses – don’t lose any tax related items due to timing.
d. Beginning the close process sooner than later will give you more time to review your financial information and give your CPA more time to review for tax needs.
e. Many programs will allow for multiple closings so be proactive andclose sooner than later.
4. Review those KPI indicators
a. Tracking what has occurred is important over the entire year.
b. Now is the time to compare where you were in the past, what this year has been and where do you want to be next year.
i. What goals need to change based on events this year?
ii. Did you accomplish what you wanted?
1. If yes, celebrate and work on that success for next year.
2. If no, celebrate what you have accomplished, and find out whythe goal was not met.
a. Sometimes this is not a bad thing!
c. Add more indicators as needed and remove those that don’t make sense.
i. It is okay to not track something that is no longer applicable.
5. Review Project reports to track progress
a. Write offs – too much, just right
i. Knowing the whys is the only way to know if the write off was acceptable or there is any need to training.
ii. This includes WIP write offs, invoice write offs, invoice adjustments.
6. Review your overhead and DPE (Direct Personnel Expenses)
a. Calculating these two percentages is the first step in evaluating your current billing rates.
b. Did they go up or down?
ii. Was this expected or not?
c. Change any settings to be sure the rates are current for costing to your projects.
7. If FAR/DOT overhead calculations are needed, time to start working on that process.
a. Avoid the last minute crunch if you can.
8. Review your standard billing rates
a. Have your costs gone up?
b. Have employee benefits/salaries changed?
i. If yes, review your standard billing rates to be sure you are covering your break-even point.
9. Review custom billing rate tables
a. Check expiration dates for any client communication needs.
b. Can rates be changed if needed?
c. If not, make notes for changes in the future as needed.
10. Are there salary changes to be entered
a. The change will affect the cost to the projects so be sure any change is entered timely.
11. Project review includes closing projects.
a. Make sure to close any old projects, no longer active or any project which is not valid.
i. This will make any reporting cleaner and keeps the old in the past.
There are other items to be done, such as cleaning up files – whether paper or digital. Keep the year end craziness out of your firm by making a plan, working the plan, and celebrating your success.
BRAYN Consulting – Enterprise Solutions team has helped clients migrate the year end chaos. We would be happy to discuss ways to help you get it all done. Contact Pat Chase, Enterprise Solutions at pchase@BRAYN.com