How Ready Are You To Close The Financial Year?

1. Develop a year end plan

Assign/confirm responsibilities and timelines for key balances and processes (reconciliations, tax ledgers, grants, inventory, fixed assets, etc.). Confirm audit timelines and any year-end procedures (more on this below).

2. Budget discipline

Hopefully you have been monitoring your budget utilization. This is a good time to consider which budget lines need to be committed and/or which activities need to be prioritized. Engage other budget holders and department heads, harmonize expectations;

3. Balance sheet health

The balance sheet/statement of financial position reports assets and liabilities at a specific date. This is a good time to review your balances and consider what proactive steps can be taken to strengthen the financial position that will ultimately be reported. For example:

• Receivables, what can we collect before year-end. How can we intensify recovery? Any staff advances with outstanding accountability? Set and communicate deadlines.;
• Payables, are there long outstanding balances that need to be settled? Reconciled? Confirmed? Written off? Any approvals required?
• Any dormant accounts?
• Any legacy balances carried forward from previous years?
• Any suspense or unexplained balances?

4. Assets verification procedures

Depending on the size and nature of assets held, this may be a particular area of focus for your auditors. Consider:

• Fixed assets, your asset register may need to be updated to confirm the location and state of the assets. Any damaged assets that need to be written down or written off (impairment test); Were assets acquired during the year updated in the register? Do balances reconcile to your Trial balance / ledgers?
• Current assets, including cash balances and inventory, may need to be counted, independently verified and count records signed off on June 30th.
• Engage your auditors in good time, they may need to participate in the year end, assets verification procedures.

5. Reconciliation procedures

are key/significant third-party balances reconciled and up-to-date? These may include:

• Bank balances,
• Significant receivables/payables (with your customers / vendors),
• Major transactions with funders, related party entities, etc.;
• Tax ledgers, depending on the nature of your business, this may be an important area of focus.

6. Contracts and supporting documentation

Your auditors will expect to see contracts and agreements for key transactions, commitments, and dealings during the year. This is a good time to ensure you have sourced all copies of these contracts, fully executed and available.

7. Regulatory compliance

This is a good time to check in with your compliance/tax team to confirm that the business is in good standing. Are they any outstanding filings/returns? Provisional Income Tax filing will be due at month end, are you proactively managing your tax exposure? The best finance teams do not discover their tax position after year end, no, they actively shape it before they close their ledgers at year end. A final review before June 30th can make all the difference.

8. Prior recommendations and findings

from internal audit reports or prior management letters, any key commitments and outstanding matters for resolution before close of the year?

9. Start preparing your audit file/pack

Audit readiness can significantly reduce disruptions to your team and internal processes. As the above points are being addressed, assemble key documentation and information in a central file to support the external audit process. Work towards being in a position where you can support any number in your financial statements within minutes.

10. Looking ahead

any key changes in regulation, processes, expectations, etc. that will impact the period ahead. For example, PAYE rates are changing effective July 1, 2026 how ready are you to implement these changes?