Our top tips for meeting your accounting deadlines effectively
August 11, 2020
As organisations navigate the upheaval caused by the COVID-19 pandemic, understanding the commercial impact is a key priority. Whilst finance teams focus on business, staying on top of the financial statements to meet deadlines may fall down the list of immediate priorities. Filing late will incur late filing penalties and can also lead to other serious consequences, for example impacting their credit rating and banking covenants.
In addition to focusing on the business, other factors impacting the ability of companies to meet their compliance obligations include:
- Dealing with going concern and liquidity risk
- Accounting implications of COVID-19 including the additional disclosures required
- Ability to provide audit evidence on a timely basis and Auditor availability
- Accessibility of technology whilst working remotely
As COVID-19 continues to impact companies around the world, its pressures will continue to distract from annual compliance being completed. We’ve been working with clients throughout the last few months to ensure deadlines are still met. Here are our top ten tips to stay ahead of your statutory accounting obligations during this time:
- Understand the deadlines, whether they have been automatically extended, and if not, how to apply for an extension if required.
- Consider the filing process in terms of scanned or wet signatures to help schedule signatures when people are working remotely.
- Set priorities based on reputational and financial penalties and the business impact of missed filings on credit ratings and financial covenants.
- Identify suitable resources who have capacity, and seek additional or external support if required.
- Agree and proactively monitor a timetable with a milestone for each key step of the process for all parties involved, including the auditors, delivery centre, legal team, tax team, HR or outsourced provider. We recommend to include steps for the tax accounting and disclosures and always allow extra time for the audit finalisation.
- Hold regular meetings with your staff, auditor and other stakeholders to identify bottlenecks at an early stage and agree whether they are your responsibility or the auditors to resolve.
- Engage with a senior member of the audit team early on to discuss the impact of COVID-19, key judgements, such as those around going concern and other new accounting requirements, and agree what additional information and evidence they will require.
- Agree a standard template with the auditors of the changes required for COVID-19 related disclosures and other new accounting requirements early in the process to avoid multiple drafts and save time at the finalisation stage.
- Ask your auditor to give you a comprehensive “Prepared By Client” information list, particularly regarding going concern which could be a major issue at present.
- Check that your finance systems are accessible for staff working remotely, and your accounts production software is up to date for new accounting standards.
Keeping these steps in mind can help finance teams to meet statutory accounting obligations and mitigate risk. To find out more about how we’re helping clients manage their accounting compliance, visit our webpage or get in touch with me to discuss our insights further.