At this time of the year, many SMEs, accountants and finance department staff countrywide are united in a common goal: achieving a successful, stress-free financial and tax year-end!
The reality of past experience confirms that a perfect year-end is frequently a pipe dream, but with some forward planning and use of available technology, there's no reason whatsoever for year-end to be anything but plain sailing.
In preparing for year-end, the three most critical components are: accounts correctly captured, accurate payroll data made ready for submissions, and properly balanced books.
The worst nightmare for any financial department is inadequate data capture or backlogs, according to Stephen Corrigan, managing director of payroll software specialist, Softline Pastel Payroll.
"Accounting and payroll software systems are essential as they form the platform upon which companies will be able to get their financial house in order. Plan ahead to avoid backlogs of uncaptured data and that's most of the battle won because without the correct data the year end process simply cannot be completed on time," says Corrigan.
"Over and above having the correct data, the next challenge is to make sure it remains available and free of corruption. Business continuity and integrity of data are also critical to a successful year-end so backup systems need to be in place and data regularly backed up. Try doing a year-end when the financial records have disappeared in a hard drive crash or computer theft and you have no backup to restore from!"
Corrigan stresses that SME payrolls have become highly complex because of constant changes to legislation on basic conditions of employment and taxation: "If the payroll records aren't accurate, legally compliant and up to date when year-end comes around, then the company faces serious challenges, to put it mildly."
Losing payroll data means staff don't get paid on time. Delays in payment can seriously undermine staff relations and destabilise the business. It is also an onerous task to recompile payroll data from scratch.
There are some basic steps companies can take to ease the pain of year-end. Corrigan recommends the following:
* Make a print out of all financial reports such as income statement, balance sheet, inventory/valuation and sales commissions well before year-end.
* Make regular backups - daily if possible. It is worthwhile investing in digital storage capacity that copes with complete backups rather than fragmented ones.
* It is wise to keep at least the previous week's backups off-site at a separate and secure location.
Periodically ensure the integrity and usability of the backups made by restoring data in a secure repository. You may just discover that your backup PC is beset with unforeseen problems. Rather establish this before your main data set is corrupted or destroyed.
Use high quality backup tapes or CDs. A secondary hard drive is a good option, particularly where temporary backups might be required if CDs and tapes of the desired standard cannot be sourced. Avoid using stiffy disks for storing critical data; they are unreliable and should only be considered as a last resort.
"Automated accounting and payroll software is the foundation of a strife-free year-end and it pays handsome dividends to maintain data capture status as up to date as possible throughout the year," says Corrigan.
"Be systematic about it. Ensure that all data is securely and correctly backed up and reap the rewards at year-end."
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