EOFY Tasks – Go from Besieged to Liberated
As you walk into the office and pass by the finance and accounting department you mention ‘EOFY’.
Suddenly, you witness a collective cringe. Why? Well, chances are they’ve been battling an onslaught of EOFY financial reporting tasks for the past three months. Yes, June 30 marked the end of the financial year, and for businesses, it was a critical time.
Concluding the fiscal year can be quite overwhelming and time-consuming, especially if a business relies on navigating multiple systems and complex EOFY workflows and processes to compile, analyse and report its data.
In this article, we’ll explore the intricacies of financial year-end activities, investigate the common pain points businesses face, and unveil how embracing an ERP (enterprise resource planning) system can transform this besieged period into one of liberation.
EOFY Key Activities
The EOFY period brings a flurry of complex end-of-year financial processes for large businesses.
Besides extensive year-end accounting duties and financial reporting requirements that outline the business’s financial performance and position, they have a multitude of tasks to wrap up the fiscal year. Many businesses must prepare for an external audit by an independent firm primarily to ensure transparency, accountability, confidence in financial reporting and the strength of internal controls.
Tax planning optimises their tax position through analysis, deductions, and risk management. While budgeting and forecasting require setting targets, estimating revenues, aligning goals, and adjusting budgets. Financial analysis evaluates ratios, profitability, and liquidity for improvement and decision-making.
EOFY activities also involve evaluating and correcting corporate governance compliance practices in-line with laws and regulations. Employee compensation reviews include salary structures and entitlement adjustments whilst asset management activities focus on valuations, depreciation reconciliation, and compliance with accounting standards.
Strategic financial planning evaluates market trends and competition and sets goals for growth and efficiency. Ultimately, comprehensive stakeholder communication delivers financial results, performance updates, and strategic plans through annual reports, investor presentations, and shareholder meetings.
These activities are vital to large businesses during this critical period, and their successful execution paves the way for a smooth transition to the new financial year.
Common EOFY Pain Points
EOFY activities can be riddled with challenges for businesses, especially when plagued by inefficient workflows and systems. These obstacles can disrupt operations and undermine the overall effectiveness of the EOFY process.
Let’s delve into some common challenges that come with fiscal year-end tasks:
- Reduced Productivity: Inefficient processes and systems lead to frustration, burnout, and reduced productivity among employees involved in EOFY activities and other annual financial obligations.
- Complex Data Management: Managing and organising financial data from the entire financial year can be a complex and time-consuming task, especially if relying on manual processes or disparate systems.
- No Data Integrity: Inefficient systems may lack proper data integration, leading to fragmented information and hampering data integrity and transparency.
- Compliance Risks: Meeting complex tax laws, financial reporting standards, and regulatory frameworks during EOFY can be demanding and increase the risk of non-compliance.
- Delays and Missed Deadlines: Strict deadlines for financial reporting, tax lodgements, and compliance filings can be challenging to meet, especially with multiple activities happening simultaneously.
- Manual Processes: Reliance on manual processes and spreadsheets increases the risk of errors, productivity loss, and increased workload during EOFY.
- Time-Consuming Auditing and Review Processes: Preparing for audits, addressing queries, and ensuring compliance with audit requirements can be time-consuming and resource-intensive.
- Labour Intensive Stocktaking and Inventory Management: Conducting stocktaking and managing inventory through manual stocktaking processes can be prone to errors.
- Ineffective Resource Allocation: Balancing workload and resource allocation during EOFY can strain resources and create challenges in maintaining business continuity.
- Technology and System Limitations: Outdated or inadequate financial systems and technologies hinder data management, reporting, and compliance processes.
Addressing these pain points is crucial to mitigate increased costs associated with EOFY tasks and responsibilities and ensure a smooth and successful EOFY transition.
How Does an ERP System Support EOFY Activities?
An ERP system revolutionises EOFY activities by providing significant data management and automating critical processes. Here’s how an ERP system streamlines operations, enhances efficiency, and reduces manual effort as your business closes out the financial year:
- Financial Data Management: An ERP system centralises financial data, automates report generation (e.g., balance sheets, income statements), and enables real-time, accurate reporting with a single click.
- Accurate and Timely Data: The ERP system automates data entry, reduces errors, and provides real-time updates, ensuring up-to-date and reliable financial records for EOFY tasks such as reconciliations and compliance reporting.
- Audit Preparation: With an organised repository of financial data and supporting documents, the ERP system simplifies audit preparation, allowing auditors easy access to required information and minimising time and effort.
- Compliance Management and Monitoring: An ERP system with automated compliance monitoring tools helps ensure that businesses meet their compliance obligations during EOFY, such as lodging tax returns and BAS statements.
- Tax Calculations: ERP systems automate tax calculations based on the latest tax laws, ensuring accurate determination of tax liabilities, deductions, and credits.
- Asset Management and Depreciation: ERP systems include asset management modules that generate reports, calculate depreciation, and streamline asset-related adjustments and reporting, simplifying year-end financial assessments.
- Inventory Assessment: ERP systems with inventory management capabilities provide visibility into stock levels, valuation, and turnover rates. They generate inventory reports, identify slow-moving or obsolete items, and assist with adjustments in line with financial reporting requirements.
- Budgeting and Forecasting: ERP systems offer budgeting and forecasting modules, enabling businesses to set financial goals, create budget scenarios, and predict revenue and expenses.
- Record Retention and Storage: As a central repository, ERP systems ensure proper record retention and storage practices required for EOFY compliance. They automate archival processes and support secure digital document management.
- Document Management: Automating document management processes to capture, store, index and retrieve information enhances record-keeping and simplifies retrieval of financial documents during EOFY.
- Workflow Automation: ERP systems automate various year-end financial reviews and workflows, such as financial report generation, compliance deadline notifications, and approval processes.
Leveraging an ERP system empowers businesses to complete year-end financial preparations with ease.
EOFY Challenges are Conquered with ERP
From besieged to liberated, businesses can unlock the power of an integrated ERP system during the financial year wrap-up period. Streamlining processes, embracing automation, and leveraging tailored solutions can save time, ensure compliance, and maximise efficiency.
With an ERP system, manual data entry becomes a thing of the past, data silos are shattered, and collaboration thrives during year-end financial management and beyond.
Inspired to Act?
Book a Discovery Call with one of our product specialists to learn more about how an ERP system can transform your business.
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