Preparing for year-end should start early
Although several months remain before the end of 2026, October is an appropriate time for businesses to review their financial performance.
With three quarters of the financial year completed, most companies can already make a reasonably informed estimate of their expected annual results.
Early financial year-end preparation allows businesses to manage tax obligations, liquidity and financial decisions more effectively.
Instead of waiting until January to assess the previous year’s performance, companies can take practical steps before the end of December.
1. Review your financial performance
The first step is to examine revenue and expenses for the first nine months of the year.
Total turnover is important, but profitability deserves equal attention.
Businesses should determine whether their results are in line with expectations and whether all significant transactions have been properly recorded.
It is also essential to distinguish between accounting profit and taxable income.
These figures may differ because of non-deductible expenses, tax incentives and other adjustments required under tax legislation.
2. Review outstanding receivables
Unpaid customer invoices can significantly affect a company’s liquidity.
Before year-end, businesses should review overdue receivables and consider appropriate collection measures.
Particular attention should be paid to invoices that have remained unpaid for an extended period.
Where there are concerns about recoverability, the appropriate accounting and tax treatment should also be considered.
3. Reconcile supplier liabilities
In addition to receivables, companies should review their outstanding obligations to suppliers.
All supplier invoices should be properly recorded, and older or disputed balances should be investigated.
Accurate and reconciled records make the preparation of annual financial statements easier and reduce the risk of accounting errors.
4. Review fixed assets and investments
Before the end of the financial year, businesses should review their fixed asset registers.
They should verify that assets have been correctly recorded, depreciation is calculated appropriately and any assets no longer in use have been identified.
Companies planning new investments should also consider whether any relevant tax incentives may apply.
5. Estimate corporate tax liabilities
If a company expects higher profits in 2026 than originally planned, its future corporate tax liability may also be higher.
Preparing a preliminary tax calculation during the autumn can help management estimate the amount that may become payable.
This allows the company to reserve sufficient funds and avoid unnecessary liquidity pressure.
6. Prepare a financial plan for 2027
Year-end is not only an accounting obligation.
It is also an opportunity to plan the next financial year.
Based on 2026 results, businesses can prepare forecasts for revenue, expenses, investments and financing requirements in 2027.
A realistic financial plan supports better management decisions and helps reduce the risk of unexpected cash-flow difficulties.
K2A advises
👉 Do not wait until the final days of December to prepare for financial year-end.
Review your financial results, outstanding receivables and liabilities, fixed assets and expected tax obligations during October.
At K2A Accounting, we help businesses organise their accounting information and prepare for the financial year-end process.