Unwrapping the Top Three Overlooked CFO Year-End Processes

Unwrapping the Top Three Overlooked CFO Year-End Processes 

Mindy Barker | Barker Associates

The holidays are upon us. And while we all may enjoy the traditions, family time, gift-giving, and merriment (likely even more so this year), there is still work to be done … particularly for CFOs. It’s time for year-end analyses and processes to end 2021 in an organized, balanced way in order to start 2022 with a clean slate. While it can all be overwhelming at times thinking about reviewing operations, marketing expenses, and all financials, it’s imperative these responsibilities are met accurately.  

Unpredictability Doesn’t Change the Basics of Financial Planning 

With all its tasks and checklists, end-of-the-year financial analyses and planning comes down to the assumption that when you evaluate where you were, you can better understand where you’re going. However, the past nearly two years has made this assumption somewhat unreliable with unpredictability appearing to be the only thing that’s predictable in business.  

Despite this volatility though, CFOs ultimately remain responsible for performing the same duties – analyzing financial reporting, balancing accounts, preparing records and documents to file and pay taxes, and creating budgets. These tasks remain stagnant regardless of outside economic factors. But it has never been more important to dig deeper into some additional, often overlooked, processes. 

Top Three Overlooked Year-End Processes 

For many, we think CFO and Year-End and we automatically think financial statements, balancing accounts, and preparing for tax returns and payroll reports, but there’s so much more. The end of the year presents a unique time to unwrap real opportunities. Whether its negotiating with vendors, securing investments, or looking for better deals with health insurance, in some instances, you can start over in the new year, advancing your company even further (not to mention faster).  

So, before you start the countdown to midnight, readying yourself for all that the new year has to offer, make sure you count the top three overlooked CFO processes so that your company is just as ready for 2022. 

1. Accounts Payable.  Sure, we remember to look at accounts receivable – our team has worked diligently, and we need to collect the money owed for that work. But what about what we owe?  

Analyzing the company’s Accounts Payable is not merely a process to get caught up on payments though (although that is also clearly crucial). Rather, it is also an opportunity to review vendor contracts and negotiate better terms in an attempt to save money in the new year.  

  • Are there any other options?  
  • Are there hidden cost savings?  
  • What does the competition look like?  

If the CFO doesn’t look at ways to save the company money, no one else will. 

2. Financial Technology. Technology has perhaps never been as important as it has been recently. Technology is what kept businesses running and team members connected when they couldn’t physically be together during a global pandemic. And yes, from an expense perspective, you’re likely spending more on it than ever before. But are you also considering what financial technology you are using? Are you asking yourself –  

  • Is it up to date?  
  • Have we switched over to the cloud, where there are automatic backups?  
  • What does your accountant use and prefer?  

If not, you probably should. This is a great time to do an end-of-year financial technology audit. 

3. Future Scenario Planning. You may be saying, “Of course, we take time to strategically plan out the year,” and I’m sure you do, but things are different now. Knowing the challenges unpredictability creates in successfully running a company, it’s crucial to expand this planning by using future scenarios. Essentially, you create different scenarios and develop the response or plan of action for that particular set of circumstances. While this type of planning was historically the foundation of crisis management, with crisis permeating every aspect of business, it plays a more prominent role in day-to-day strategy.  

With future scenario planning, you define triggers in advance and commit to be flexible and nimble enough to account for them. For example, a common future scenario planning topic this year is PPP forgiveness. For those who do not know yet if their PPP loan has been forgiven, future scenarios include full forgiveness, partial forgiveness, and no forgiveness. Analyzing how each of these scenarios will affect your business next year is key to unlocking future success. 

Barker Associates has extensive experience in year-end processes and planning. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.   

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