For many finance teams, year-end can often feel like an uphill sprint, with long hours, last-minute surprises, and the pressure of audits landing simultaneously. But what if finance teams were armed with timelines, continual processing, and streamlined month-end tasks that all led to a calm, controlled year-end close?
The power of continual processing
The biggest opportunity for most charitable organisations is simple: stop treating year-end as a single monumental event. By shifting towards a continuous close process, finance teams can maintain adjustments, reconciliations, and forecasts throughout the year and prevent a frantic close.
These mindset shifts include:
- Treating year-end like month-end: Carrying out accruals, prepayments, allocations, and adjustments regularly, not just at year-end, allows finance to drill and perfect the year-end process.
- Adopting rolling forecasts: Updating budgets monthly or quarterly, depending on volatility and size of organisation, enables charities to forecast at least 12-18 months ahead.
- Reducing surprises: Conducting mini year-ends every quarter helps to prevent surprises when auditors arrive. This is particularly important for charities with complex reporting structures.
With better visibility over numbers, decision-making improves and leadership gain more confidence in financial data throughout the year.
Why timelines work
If year-end feels chaotic, start by creating a clear, realistic timeline. Mapping out both statutory and stakeholder requirements allows you to work backwards from each deadline. Timelines work by detailing the different types of tasks each stakeholder is required to complete, from auditors and trustees to lenders and grant funders.
During this time, it’s worth listing all information needed for the notes to the accounts (eg commitments, employee numbers, leases). Typically, this information is gathered at year-end, adding pressure to finance, but factoring in time to complete this task is an achievable way to streamline year-end.
Housekeeping tasks throughout the year
Reviewing policies and systems is a mammoth task at year-end, so why not perform regular housekeeping duties throughout the year? This helps to prevent bottlenecks and highlights any instances of non-compliance before they escalate.
If you’re unsure of which areas to revisit, consider the following tasks and allocate a few to your finance team members so workload is shared and momentum continues.
Accounting policies to review:
- Reserve policies, especially restricted vs designated reserves.
- Going concern assessments.
- Bad debt provisions.
- Depreciation groups and capitalisation thresholds.
Systems and setup reviews:
- Configuration for funds, projects, and coding.
- Read-only auditor system access.
- Automated reconciliations.
- Pre-built recurring reports.
- Audit-trail automation and navigation.
No matter the size of your finance team, allocating time to review these areas throughout the year can save days, even weeks, of time-consuming work. Small changes and regular reviews often have the biggest impact when it comes to preventing year-end chaos, as they highlight where finance needs to focus on, be it compliance, system setup, or reporting.
Peter Hucker is CEO of Xledger
