This is what to consider for the annual financial statement.

A turbulent year is coming to an end and soon the financial close will be upon us. As part of the preparation of the financial statements, it’s necessary not only to gather documents but also to perform document reviews and make adjustment entries. Therefore, it pays to start preparations early.

Swiss companies are obliged to prepare financial statements at the end of the business year. These serve to give stakeholders of a company an overview of its financial position. Although the extent of the financial statements varies depending on the size and legal form of the company involved, there are a number of tasks that inevitably arise.

Preparatory Actions

Before the financial statements can be prepared, various preparatory measures need to be taken. In a first step, it is necessary to gather all relevant documents. These include, for example, bank statements, inventory lists, or the financial statement from the previous year. As part of the preparatory actions, all transactions must also be recorded as completely as possible and the corresponding year-end entries made. Which balance sheet positions need to be adjusted for the financial statements largely depends on the business activities of the company. In general, year-end accounting entries include adjustments for deferred charges and primarily for depreciation, provisions, and reserves.

Adjustments and Corrections

In order for the annual results to be correctly represented in the financial statements, adjustment entries and other modifications may be necessary. It is worthwhile to create a list of necessary entries early on to ensure that nothing is overlooked when making the financial statements. In addition to a general review of accounts for possible errors, specific corrections may also need to be made. In the assets area, this includes, for example, the booking of allowance for doubtful accounts, the adjustment of inventory to the inventory results, or the review of the evaluation of items. On the liability side, it is particularly important to ensure that the necessary provisions and reserves have been correctly formed and recorded.

Preparation of the Financial Statements

Once all preparatory actions are completed, the financial statements can be prepared. It is important to comply with all legal and industry-specific regulations. Depending on the size and legal form of a company, the preparation of a cash flow statement or a management report as part of the financial statements may also be necessary. If the statements are completed according to a specific accounting standard, compliance with the rules and regulations underlying this standard must be ensured. Additionally, attention must be paid to minimizing the tax burden when preparing the financial statements.

Findea helps you keep an overview of your company's financial situation at all times.