Preparation of financial statements begins with accounting verification
At the end of the financial year, it is not enough to just generate the reporting forms. Before preparing the financial statements, the accounting for the year must be completed, the most important balances must be checked and the accounting must be evaluated for any unfinished or unclear transactions.
An orderly closing of the year helps to ensure that the data presented in the financial statements correspond to the actual state of the company's accounting.
What do we check before preparing financial statements?
- Debt balances of buyers and suppliers.
- Bank and other money account details.
- Accounting and depreciation of fixed assets.
- Inventory balances when they are relevant to the company's operations.
- Wage and employee related obligations.
- Status of tax obligations and declarations.
- Allocating income and expenses to the correct period.
Year closing and financial statements are not the same stage
Accounting must be completed first. This means that all necessary documents must be registered, necessary adjustments made and balances checked.
Only then can a set of financial statements applicable to the company be prepared from the final accounting data.
What data usually causes problems at the end of the year?
Most of the time, more work occurs when debts have not been checked periodically during the year, documents are missing, settlements are unclear, accounting for fixed assets has not been completed, or declarations have not been submitted or have to be corrected.
In such cases, accounting verification may be needed before preparing financial statements.
What must be submitted for year closing?
The required information depends on the company's activities. We usually check that we have all the year's documents, bank details, debt information, fixed asset documents, inventory data and other information relevant to the specific company.
You can find a practical preparation checklist in the article Annual financial statements: what to prepare.
How are financial statements prepared?
- We evaluate the state of accounting and the missing data of the year.
- We are checking the main accounting balances.
- We are doing the necessary year-end work.
- We prepare relevant financial reports for the company.
- We reconcile the final process and the required actions.
If the company's accounting is managed by our team throughout the year, the financial year-end closing is a natural part of the monthly accounting continuation.
Frequently asked questions
Brief answers before we start working together.
01When does the preparation of financial statements begin?+
First, accounting for the reporting period must be completed and the most important accounting balances checked.
02Do you check accounting balances before financial statements?+
Yes. We evaluate key balances and other data that affect the preparation of financial statements.
03Can you prepare financial statements if another accountant has done the accounting?+
Yes, but first you need to assess the condition of the transferred accounting, completeness of documents and accounting balances.
04What to do if accounting errors are found before closing the year?+
First, we determine their scope and impact on the accounting, then make a plan for the necessary corrections before the final closing of the year.
05Is the preparation of financial statements part of permanent accounting?+
It depends on the agreed scope of services. Year-end closing and financial statement work for permanent accounting clients may be included in the agreed scope of services.