How to Run a Year-End Financial Close
Introduction
Section titled “Introduction”The fiscal year-end is one of the most important financial events for your corporation. Done well, it sets you up for a clean audit, an accurate budget, and a smooth start to the new year.
Step 1: Confirm Your Fiscal Year-End Date
Section titled “Step 1: Confirm Your Fiscal Year-End Date”Most Saskatchewan condo corporations use December 31, but your bylaws may specify otherwise. Give yourself at least 4–6 weeks for a thorough close.
Step 2: Reconcile All Accounts
Section titled “Step 2: Reconcile All Accounts”Every bank account — operating and reserve — needs to be reconciled. Your records must match the bank’s records exactly. Any discrepancy needs to be found and resolved before year-end.
Step 3: Review Accounts Receivable
Section titled “Step 3: Review Accounts Receivable”Are any unit owners behind on condo fees? Document the amounts and dates. Overdue balances need to be reflected accurately on the balance sheet.
Step 4: Accrue Outstanding Expenses
Section titled “Step 4: Accrue Outstanding Expenses”If services were received before year-end but invoices haven’t arrived yet, those expenses still belong in the current year. Common examples include snow removal, legal fees, and management fees billed in arrears.
Step 5: Confirm Reserve Fund Contributions
Section titled “Step 5: Confirm Reserve Fund Contributions”Verify that all planned monthly contributions to the reserve fund were made and recorded correctly — in the reserve fund, not the operating fund. This is one of the first things an auditor checks.
Step 6: Review Budget Variances
Section titled “Step 6: Review Budget Variances”Compare actual results to your annual budget line by line. For any significant variance — over or under — document the reason.
Step 7: Prepare Your Year-End Package
Section titled “Step 7: Prepare Your Year-End Package”Your accountant will need: reconciled bank statements for all accounts, a full trial balance, a list of outstanding payables and receivables, reserve fund details, and any contracts or loan documentation.
A Note on Fund Accounting at Year-End
Section titled “A Note on Fund Accounting at Year-End”If you’re using proper fund accounting, year-end close is significantly cleaner. Each fund’s activity is already tracked separately, so there’s no untangling to do.
Disclaimer: For general informational purposes only. Not legal, financial, accounting, or tax advice.