Year-End Accounting: Reflecting on the Past and Preparing for the Future
For finance and accounting professionals, closing out one fiscal year while segueing seamlessly into the next places heavy demands on time and resources. However, a thorough review of the past year and a proactive approach to the future can make the process far more manageable.
Our webcast, “Managing the Demands of Year-end Accounting Considerations,” presents in-depth details and support for this critical period. Drawing on insights from the webcast, this article highlights key points of action organizations can take to be more prepared.
Reflecting on the Past Year
Conducting a year-end review of an organization’s finance and accounting functions can reveal strengths, weaknesses, opportunities, and vulnerabilities. Both internal and external forces influence past performance and inform future planning.
Key internal considerations include:
- Budgets, forecasts, and variance analyses: How did the organization’s actual financial performance compare to plans and projections?
- Resource planning: Did the organization manage its turnover well, perhaps by backfilling positions, leveraging interim strategic resources, or through a co-sourcing model?
- Audit findings: Did audits reveal the need to update internal controls and procedures?
The macroeconomic environment in 2025, along with political and regulatory developments, may have affected organizational performance and planning for 2026. Such external factors include the following:
- Tax legislation: Even if new tax laws, such as the One Big Beautiful Bill Act (OBBBA) did not affect the 2025 tax year, it’s critical to understand any implications for 2026.
- Tariffs: Consider how tariffs are being managed, as well as their potential impact on budgeting and financial planning.
- Corporate transactions: Review the organization’s accounting treatment for capital raises, debt financing, and acquisitions that occurred in 2025. What are the implications for 2026 financial reporting?
- Reporting requirements: Are procedures and internal controls in place to ensure compliance with new reporting requirements?
The relative importance of these factors can vary depending on the organization’s industry, business model, and strategic priorities.
Preparing for Next Year
After reviewing the prior year’s financial results, organizations may focus on several key areas to help ensure a successful transition into the new fiscal year:
- Resource planning: Proactive workforce management can reduce or eliminate disruptions while improving operational efficiency. Strategies involving fractional support, outsourcing, co-sourcing, temp-to-hire, or interim staffing strategies may benefit organizations experiencing the following common workforce-related scenarios:
- Planned vacancies
- Seasonal demands
- Skill gaps for special projects (e.g., GAAP or IFRS compliance, international tax reporting, and implementation of new accounting standards)
- Internal controls and processes: Audit results may reveal areas of improvement for an organization’s internal controls and processes related to financial reporting and audit preparation.
- Technical accounting considerations: Finance and accounting teams must address a wide range of technical issues during an organization’s fiscal year, including but not limited to:
- Lease modifications, measurements, and remeasurement events
- Accounting for business combinations, including acquisition accounting and consolidation
- Going concern evaluations and related disclosures
- Accounting Standard Updates (ASUs): It’s crucial to determine which ASUs may affect the organization, including the impact on footnotes in financial reports.
- Audit preparation: Use current audit findings to identify opportunities to improve future financial reporting and implement changes as early as possible.
- Compliance: New laws and regulations could affect the organization’s recordkeeping and financial reporting. Has the organization identified any necessary changes to avoid noncompliance?
By proactively addressing year-end accounting considerations, organizations can improve communication between stakeholders and make the most of resource options.
Practical Tips for Year-End Planning
While our “Managing Year-End Accounting Considerations” webcast offers in-depth insights, the following practical guidance can help finance and accounting teams begin their new year:
- Create and maintain a deliverables calendar to track deadlines and avoid overlooking critical tasks.
- Provide sufficient audit coverage to your in-house team.
- Prioritize “heavy lift” and time-sensitive matters that may be time consuming or require early attention.
- Use the months leading up to fiscal year-end by performing interim audit work, such as testing new investments, gathering documents for walkthroughs, and reviewing revenue transactions.
- Connect with the audit team early and often.
- Examine past challenges faced in this year’s audit, address potential changes in strategy, and review auditor management letter comments.
- Prepare first drafts of financial statements and footnote disclosures, using them to identify and address gaps before the audit begins.
- Hold regular meetings with the audit team and promptly communicate updates.
- Consider conducting annual impairment testing for goodwill and indefinite lived intangibles when preparing for year-end audits.
- Evaluate current finance and accounting staffing plans, identifying areas where external support might add value.
Implementing comprehensive strategies and best practices can help organizations address audit and financial reporting challenges that can help an organization better manage its year-end processes.
Have Your Organization’s Year-End Considerations Been Addressed?
Learn more about managing your organization’s finance and accounting functions by listening to Managing the Demands of Year-End Accounting Considerations. Our Accounting & Reporting Advisory Services, F&A Strategic Resources, and Outsourced Finance & Accounting can offer guidance and assistance based on your organization’s needs.