Boosting Efficiency in Finalising Accounts: Strategies for UK Accounting Practices
Getting the Finalising Accounts done for your clients is not a small job; it is a big process. Under it, the final financial statements will be prepared according to UK accounting standards and regulations. The main motive of this guide is to give your in-house team a better understanding of the Finalising Accounts and its positive impacts on your practice.
First things first, let’s understand the finalisation of accounts a little deeper. It is a comprehensive and formal process that takes place at the end of the financial year. The main objective of the finalisation of accounts is to provide a clear financial picture for stakeholders, including management, investors, and regulators.
While doing the finalisation of accounts, your in-house accounting teams must have come across the terms- financial close and closing of books. While it is related to the finalisation of accounts, they are not the same. The closing of books is a process of ending an accounting period under which summarising all financial transactions, adjusting entries, and zeroing out temporary accounts is done. On the other hand, the finalisation of accounts is a process where financial statements such as profits and loss and balance sheets are prepared after the books have been closed.
To understand closing of books in a detailed manner check out our blog, what does closing of books mean in accounting. For now, let’s focus on finalisation of accounts and its importance for accounting practices.
Importance of Finalisation of Accounts
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There are multiple reasons why finalisation of accounts is important for your practice and efficient decision-making for your clients. Let’s find out.
Maintaining Up-to-Date Records and Full-Compliance
As an accounting practitioner, you will understand how important it is to fully comply with the latest UK accounting standards and HMRC regulations. The accuracy of financial records can be maintained and updated through finalisation of accounts. By maintaining full compliance with UK accounting standards and regulations, your practice will be able to establish the foundation for creating financial statements that are accurate and trustworthy for your clients and HMRC.
Accuracy in Reports
Under the finalisation of records, ample attention is paid to removing errors, misstatements, or omissions and auditing records if required. All these efforts result in accuracy in financial records, which will help in making accurate financial reports. These accurate reports will provide valuable and accurate insights to your clients about their financial performance. It will also help them in identifying areas that require improvement.
Demand for Accurate Reports from Stakeholders
Banks and investors are very much interested in getting their hands on accurate and well-structured financial reports. These reports will help them analyse your client’s financial performance and consider the decision to lend or invest in them. Finalisation of accounts plays a significant role in preparing accurate financial reports.
Steps Involved in Finalisation of Accounts
To perform finalisation of accounts process smoothly, you will have to follow a series of steps. Following these steps in an ascending manner is important for maintaining smooth account finalisation and report preparation.
Step 1: Reconcile all Accounts
Always start the finalisation of accounts with reconciliation. Reconciliation verifies all the recorded transactions, thus ensuring accuracy. It also helps identify errors and discrepancies that can lead to incorrect financial statements or worse.
Step 2: Preparing Year-End Adjusting Entries
The second step is preparing year-end adjusting entries. These entries will ensure the accuracy of the financial statements and show your client’s actual financial position. They will include adjusting for depreciation, accruing expenses, or recognising revenue. Make sure that these entries are not missed.
Step 3: Preparing Financial Statements
The third step is preparing financial statements, including a balance sheet, income statement, and cash flow statement. These statements will show your client’s financial position and allow them to make informed business decisions.
Step 4: Evaluation of Financial Statements
Once the financial statements are prepared, they must be analysed thoroughly. Thorough analysis involves checking their accuracy and identifying areas for improvement. By examining the financial statements, you can provide insights into your client’s performance and identify errors in the report.
Step 5: Comply with HMRC Regulations
The last step in the finalisation of accounts is maintaining compliance with regulations and filing tax returns. Compliance involves following all the relevant UK tax regulations and filing all the required tax returns. It is important for accounting practices to make sure their clients are operating legally to avoid potential penalties.
After going through these steps and your experience, you must have concluded that following these steps of Finalising Accounts is important but time-consuming. Naturally, such a time-consuming process will impact your attention towards other essential accounting tasks, but the good news is it can be avoided. By choosing to avail of the outsourced year end services offered by outsourced accounting service providers, you can significantly save time and improve your service quality and efficiency.
What Are the Benefits of Outsourcing the Finalisation of Accounts?
While you can expand your in-house team to manage the finalisation of the accounts process, it will be a huge burden on your budget. On the other hand, your practice will save a considerable amount of money by choosing to use the outsourced year end service offered by accounting service providers. That’s the reason why outsourced year end services are trending. Let’s understand its benefits for your accounting practice:
Access to Expert Talent and Expertise
One of the main benefits of outsourcing finalisations of accounts is getting access to trained and experienced talent. Professional outsourced accounting service providers have a team of experts who specialise in UK accounting standards and regulations. They will monitor the updates in standards and regulations on your behalf and help maintain full compliance. Using outsourcing services, you will be able to add value to your accounting services and support your clients better.
Improves Efficiency and Accuracy
Professional outsourced accounting services use the latest tools and technology to manage high volumes of financial records accurately and efficiently. Technology reduces the chances of errors and ensures that the financial statements fully comply with the latest accounting standards.
Saves Time
Finalising Accounts is time-consuming and can be completely avoided by using outsourced year end services. Through these services, you can save time and free up resources used in handling finalisation of accounts. Thus, you can now focus on completing your core accounting activities and client interactions.
Conclusions
Understanding the Finalising Accounts is easy, but implementing it takes work. For this reason, we have broken down the finalisation of accounts and explained the steps that will make the process easier for you. By getting the finalisation of accounts right, you can generate trustworthy and insightful financial reports and position your accounting practice as a professional, experienced, and highly reliable practice among your competitors.
However, we understand the challenges you will face while implementing the steps in finalising accounts. While these steps are important, they will burden your finances and slow down the process. Multiple accounting practices have faced such a situation, and they have chosen to use the outsourced year end service offered by outsourced accounting service providers.
Many service providers understand the requirements of accounting practices based in the UK and have started offering professional outsourcing services to them. However, Corient UK has been the rising star and the most proactive among them. We are an outsourced accounting service provider based in Coventry, United Kingdom. At the same time, we have considerable experience in offering outsourced year end services and a wide range of services, from bookkeeping and payroll to corporation tax and audit. Our services have been recognised for bringing qualitative changes in the services of multiple accounting practices, and we can do the same for you. State your queries and requirements on our website contact page, and our executive will contact you as soon as possible. We look forward to partnering with you in your success.