As the final quarter of 2024 kicks into gear, accountants everywhere know that the busiest time of the year is just around the corner. Year-end is the most critical period for businesses and their financial professionals, packed with deadlines, compliance requirements, and additional workload. But with some planning and preparation, year-end can be manageable.
In this article, we’ll break down the steps accountants should take now to prepare for year-end. By getting ahead of the rush and maintaining a clear focus on organization and communication, you can ensure a smooth close for your firm and your clients.
Start Early and Get Organized
When it comes to year-end preparation, the earlier you start, the better. October is the ideal time to begin planning, as this period is a buffer between the current quarter and the frantic last few weeks of the year.
Begin by making a checklist of all the tasks that need to be completed before the year-end close. These might include:
- Gathering necessary financial documents from clients.
- Verifying that records are accurate and up to date.
- Organizing any outstanding transactions and reconciliations.
- Reviewing changes in tax laws or accounting standards that could affect reporting.
If your firm uses a workflow management tool like Karbon, now is the time to ensure all tasks are assigned, and deadlines are clearly visible. This is crucial for your team’s efficiency and giving your clients confidence that their year-end process is on track.
Encourage clients to start gathering and organizing their financial documents, even if they still need to be ready to submit everything. The more prepared they are, the smoother their work will go when the time comes.
Communicate Early and Often
Clear communication is essential for a successful year-end close. During this busy time, the last thing you want is a miscommunication that leads to delays or errors. Set clear expectations early by contacting clients and tax providers to discuss their timelines, requirements, and potential issues.
For clients, this is the time to:
- Verify contact details and update client records.
- Confirm if anything significant has changed in their business, such as ownership changes, new hires, or significant transactions.
- Discuss deadlines, especially for tax filings and compliance-related tasks.
- Review payment methods and vendor relationships to ensure W-9s are collected before year-end to avoid a rush in January.
For tax providers and bankers, now is the time to:
- Reach out and ensure you’re aligned on deadlines and requirements for filings.
- Ask for checklists or documents they need well in advance so you can gather everything before the holiday season.
Be proactive in checking in with clients and partners between now and the end of the year. Many businesses are preoccupied with holiday plans, so consistent communication will keep them engaged in the process. Remember their timelines and remind them that early action is vital to avoiding last-minute chaos.
Plan for Compliance and Deadlines
Year-end comes with many compliance-related tasks, from issuing 1099s to filing sales taxes and adhering to state-specific reporting requirements. Staying ahead of these deadlines is one of the biggest challenges for accountants, but early planning can help mitigate the stress.
For example:
- 1099s: Ensure you have all the required W-9s from vendors before year-end. Waiting until January to collect these forms will cause unnecessary delays.
- Sales Tax Filings: If your clients sell products or services subject to sales tax, ensure their sales tax reports are accurate and ready to file early in the new year.
- Industry-Specific Compliance: Certain clients may have additional year-end compliance needs depending on the industries you serve. For instance, the wine industry requires businesses to submit filings with the Alcohol and Tobacco Tax and Trade Bureau (TTB), and California wine growers must meet additional state requirements.
Take stock of all deadlines and compliance requirements now, and create a detailed plan to manage them throughout Q4 and into January. This will help your team prioritize tasks and avoid the dreaded January scramble.
Use Technology to Stay on Track
Workflow management tools and accounting software are invaluable for staying organized and aligning teams. If you still need to start using a platform like Karbon, now is the time to implement a system that allows you to manage tasks, assign responsibilities, and communicate with your team in one centralized location.
Here are a few key ways that technology can help during year-end:
- Automated Task Reminders: Set up task lists and deadlines in your project management software, then enable automated reminders to ensure nothing slips through the cracks.
- Client Task Automation: Use client portals and automated emails to request documents from clients, track their progress, and send reminders without manually following up each time.
- Document Management: Store all important client documents in a secure, centralized location that your team can access. This prevents important files from getting lost in email chains and allows for quicker access when deadlines are looming.
By using technology, you can streamline processes, minimize errors, and keep everyone on track throughout the year-end rush.
Mentally Prepare and Prioritize Well-Being
Year-end can be incredibly stressful, with longer hours and tighter deadlines. Many accountants feel the pressure build as the weeks pass, and it’s easy to overlook self-care when you’re swamped with work.
But it’s essential to prioritize your mental and physical well-being during this time. Here are a few tips:
- Establish a Routine: Stick to a regular work routine as much as possible, even when deadlines loom. Set aside time each day to step away from your desk, get outside, or exercise. A clear mind will make you more efficient and less prone to burnout.
- Delegate When Possible: If you have team members available, delegate smaller tasks or administrative duties so you can focus on the bigger picture. Having the right support can make all the difference.
- Stay Flexible: Sometimes, despite the best planning, things don’t go according to schedule. Clients may need extensions, or emergencies may arise. Stay flexible and try to adapt without becoming overwhelmed.
Remember that your clients rely on you for guidance during this busy time, and being mentally prepared will help you meet their needs without sacrificing your well-being.
Don’t Forget About 2025
While year-end is the focus, now is also the time to start thinking about 2025. Take the opportunity to discuss next year’s goals and budgets with your clients, particularly as you close out 2024. Setting a solid financial foundation for the new year can lead to better decision-making and improved business performance.
Encourage your clients to start thinking about:
- They are creating or updating their budgets for the new year.
- We are reviewing business goals and aligning their financial plans accordingly.
- They are implementing any changes or improvements to their internal processes to make 2025 smoother financially.
Planning for 2025 will make January less stressful and give you and your clients something positive to focus on.
Be Aware of Holiday Closures
Finally, planning year-end activities is essential to account for the holiday season. Many businesses—including accounting firms—shut down during the last week of December to allow employees time to rest and recharge. Ensure your clients know your firm’s holiday schedule so they know when they can reach you.
At Protea Financial, for example, we observe a complete shutdown from December 20th to January 2nd. This allows our team to enjoy the holidays and return ready to hit the ground running in the new year.
Year-end doesn’t have to be a chaotic scramble. You can ensure a smooth and successful close by starting early, staying organized, maintaining clear communication, and prioritizing your clients and well-being. Accountants play a crucial role in helping businesses navigate this critical period, so take the time now to prepare yourself and your team for the busy season ahead.
Now is the time to contact clients, plan for compliance, and utilize the tools that will make your job easier. With proper preparation, you can handle year-end with confidence and ease.
