Checklist for end-of-year activities
Dec 23, 2021
By: Shay Strashnov – Partner and Owner, Strashnov Calderon
The end of the year is approaching, and this is the time to pay attention to several important points and their potential impact on your company in the coming year.
1. Preparing an Estimate of Year-End Business Results
As the year comes to a close, there are a number of business actions that can significantly affect the annual bottom line and should be carefully considered. In this context, factors such as tax considerations and financing strategies are taken into account.
These considerations often conflict with one another, which makes it especially important to thoroughly examine their potential implications now.
By: Shai Strashnov – Partner and Owner Strashnov Calderon
The end of the year is approaching, and it's time to pay attention to a number of important points and their potential impact on your company in the coming year.
1. Formulating an estimate of the results of business activities for the end of the year
Towards the end of the year, there are a significant number of business moves that greatly affect the annual profit line that must be recognized. In this context, taxation and financing considerations, among other things, are taken into account.
Usually these will be considerations that contradict each other, and therefore it is of great importance to examine in depth their various implications now.
2. Financial covenants
Companies that have signed a commitment to maintain financial standards will need to examine their compliance with the conditions set in advance by the financing entities as soon as possible by preparing a pro forma balance sheet. If there is concern about a deviation, it is highly advisable to contact the financing entities and alert them to this as soon as possible, while having a dialogue about adjusting the standards or waiving actions on their part.
This transparency will help prevent the possibility of credit default or at least maintain a healthy relationship with the financing entity.
2. Financial Covenants
Companies that have committed to maintaining financial covenants must assess their compliance with the conditions set in advance by their financiers as soon as possible, typically by preparing a pro forma balance sheet. If there is any concern about a potential breach, it is highly advisable to notify the financiers promptly and engage in a dialogue regarding adjusting the covenants or refraining from certain actions.
This transparency helps prevent the risk of loan default or, at the very least, maintains a healthy relationship with the financing party.
3. Inventory count and/or work-in-progress inventory
This is the stage where you need to formulate the cost of sales for the end of the year in order to close the financial statements. An early understanding of the situation will allow you to re-examine the efficiency of the inventory and even make it possible to take special moves for the end of the year, including special promotions or deals, in order to remain at the end of the year with inventory that is appropriate for the correct profitability as much as possible.
4. Building a budget
Building a budget that is carried out professionally and correctly can significantly help a company in creating a roadmap for its business activities for the next year.
Building a budget should include consideration of the level of economic control and oversight over profitability, more accurate management of the financial implications of the budget, and making more informed business decisions for the ever-changing reality. Even though it's the end of the year, it's not too late to do so.
5. Proper planning of the project – designed for real estate developers.
Detailed, precise, and forward-looking planning will determine whether the project will succeed or fail.
Beyond the planning and construction aspects, architectural planning and legal advice, and examining the profitability of the project, consideration must also be given to the financial/financing aspect.
Do our working assumptions regarding expenses match the criteria of the funding agencies? What are the options available for financing the project?
Does it start and end with the financing rate and interest rate, or are there other aspects that are important to pay attention to?
For example: How do I decide between pre-sales and a mezzanine loan?
A recent study by the Competition Authority reveals that most entrepreneurs only turn to their main bank.
It is important to note that when considering additional options, Strashnov Calderon greatly assists entrepreneurs and contractors in properly approaching the financing of their needs.
Beyond the process of selecting a funding source, there are additional aspects of the issue that can affect the project's bottom line or the degrees of freedom for the next project.
Strashnov Calderon is well known by banks and financing bodies and has been highly appreciated over the years for its work method and professional and thorough approach.
Strashnov Calderon specializes in the economic and financial management of companies and businesses that are in their growth stages, transitioning from a small business to a large business.
The company provides outsourced financial management services to companies thanks to the unique experience and knowledge that the company has accumulated over two decades, through which it helps the organization grow, become more efficient, and increase profitability while using the relevant funding sources responsibly and correctly.
Given our extensive experience, we will be happy to assist you.
Please contact us for further questions:
CPA Yahli Kodenchik - Business Development, Strashnov Calderon Company
03-6129237
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