After a financial crisis in 2020 followed by an economic boom for many industries in 2021, accounting teams and their Controllers must be more detail oriented and strategic than ever. How they prepare for the year ahead could impact the business’ success for years to come.
From closing the books accurately to forecasting revenue numbers for the year ahead, there are many critical pieces an accounting team executes at the end of the year that financial leaders should be preparing for now. Here are the 5 things Controllers should be focused on now through the end of the year in order to start 2022 strong:
Make adjustments in budgets and forecasts:
Depending on the business, old metrics and comparisons between this year and the year prior may provide little to no help in creating accurate forecasts for 2022. Finance teams should make changes to their income statement and cash flow forecasts considering the anomaly the last two years have been.
While the days of annual budgets are not over, it is imperative to develop short-term forecasts to supplement longer-term forecasts due to the rapidly changing market. The short-term forecasts need to be actively monitored and adjusted to reflect the ever-changing supply, demand, and economic trends.
Reconcile the books:
Controllers are closing the books and wrapping up an entire year’s worth of business, therefore, it is imperative they have everything organized to start off the following year strong. If there are any issues with how reconciliations were done or how assets were allocated, those issues will need to be fixed before 2022. Rather than carrying work over into the New Year, take the time now to review financial statements carefully and thoroughly.
Meet with management:
Controllers should be meeting with the management team and discussing plans around growth and how they are going to achieve goals in 2022. Everyone will provide a unique perspective on the business and their teams and may have differing ideas on where they would like to increase spend in the year ahead. This can be an opportunity to show leaders where their teams can be more efficient or where there is room to do more. It’s also important to meet with managers of non-revenue-generating groups that contribute to the SG&A spend, like marketing, IT, or training.
Begin tax preparation and prepare for audits and reviews:
If the company uses third-party assistance for audits and tax help, reach out to the point of contact to discuss any new laws or business changes that may impact the upcoming year. This can help the team to stay on top of necessary documentation.
At the start of any new year, there will be plenty of new initiatives the company will need the accounting team’s support with, so spend time now auditing social security numbers and ensuring W-9 forms are correct. Ensure all the forms needed are accounted for before moving forward in the auditing process. Mistakes with social security numbers are costly for employees and organizations, so be proactive to mitigate any mistakes on the front-end.
Consider the team:
Take a step back and assess the year for each individual and provide feedback on where they excelled and areas that can improve. Think about how they were best managed, where they excelled and where they fell short over the year. Was their workload achievable? Is there a gap in expertise? Begin goal setting for 2022 and take into consideration what the team wants to accomplish and how it aligns with the overall goals of the department.
COVID has changed many things about the nature of work, from introducing remote or hybrid work, to digital innovation, demand fluctuation, supply chain disruptions and more. It is likely many businesses’ models or policies have evolved as a result. Ensure goals and metrics currently in place for the team and other departments within the business are still applicable and relevant to their success. Strategizing how to most effectively lead and measure teams’ success in the new year must be executed before January 1 to start 2022 strong.
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