Beyond the operational challenges, the financial risks can be significant. Late filings can incur penalties, while inaccurate tax submissions may trigger audits or result in missed opportunities to claim deductions.

“If there’s improper closure, discrepancies may arise in financial data during external audits,” explains Eunice. “This can result in a qualified audit opinion, or worse, a disclaimer causing reputational damage and closer scrutiny from regulators.”

The financial consequences don’t stop there. Shuzhen warns of costly auditor overrun fees, explaining: “When audits extend due to improper closures, auditors charge additional fees, creating a domino effect of penalties and delays.

Additionally, inaccurate financial statements can mislead stakeholders such as investors and creditors, resulting in poor decision-making and damaging the company’s reputation.

By understanding these challenges, companies can proactively plan and implement strategies to mitigate risks while ensuring compliance.

One of the most effective ways to streamline year-end closing is to start preparations well in advance to prevent last-minute bottlenecks. Allocating tasks across the team and engaging external auditors or tax advisors is essential.

“Early preparation also ensures ample time for reviewing financials and resolving discrepancies,” explains Shuzhen. “The key is to plan in advance and allocate tasks across the team instead of rushing everything at the last minute.”

Start by scheduling the audit timeline months ahead of deadlines and assembling critical documentation early so you avoid last-minute scrambles when regulatory cutoffs loom.

Conducting monthly or quarterly account reconciliations reduces the workload at year-end, avoiding last-minute adjustments. These regular reviews are not only for year-end closing procedures but also play an important role in proactively managing tax and the company’s financial position.

“Tax returns follow statutory timelines, but what is more important is preparing tax provisions on a regular basis,” says Eunice. “This helps highlight deductible items and income levels early, allowing companies to plan their tax strategy rather than rushing at year-end.”

Maintaining a recurring audit schedule throughout the year also helps businesses reduce the burden of additional work during year-end close. Shuzhen explains: “By maintaining a schedule on a monthly or quarterly basis, you minimise the number of last-minute adjustments,” she says. “This also reduces additional work by keeping documents ready for auditors in advance.”

Analytical reviews of financial statements, such as monitoring gross margins and financial ratios, are another critical component. “Finance teams should do analytical reviews more often rather than waiting until year-end,” says Shuhzen. “This is so they can provide more updated information and rectify issues early. This ensures teams have a clear idea of how the business is doing before year-end.”

Automating routine tasks like reconciliations and reporting can save significant time and reduce errors. “Automation tools eliminate inefficiencies and ensure real-time financial insights, which are crucial for accurate reporting,” advocates Shuzhen.

Tools like cloud-based accounting software can simplify workflows and ensure data accuracy. Automation, in turn, is critical to helping businesses meet submission deadlines and avoid costly corrections.

Regular updates on financial and tax positions keep stakeholders informed and reduce last-minute queries. This also has additional benefits, as Eunice explains. “Senior management will always ask, ‘What is my tax position? Are we paying tax, or are we in a tax loss position?’ Instead of waiting until year-end, finance teams should provide monthly or bi-monthly tax position updates so that stakeholders are well-informed ahead of time.”

This fosters transparency, strengthens trust and ensures the company is aligned on financial priorities.

Changes in accounting standards, tax legislation and financial reporting requirements can significantly impact year-end closing. “Throughout the year, companies must track updates in tax rates, deduction rules and reporting requirements,” says Eunice. “Failing to account for these changes at year-end can lead to incorrect filings and potential penalties.”

Engaging tax advisors and specialists like BoardRoom will ensure the company’s accounting and tax filings align with the latest statutory requirements.

Use the year-end closing process to reflect on what worked and what didn’t to improve future years. “A post-mortem review allows businesses to evaluate challenges, identify opportunities for improvement, and streamline processes for the next financial year,” recommends Eunice.

Involving cross-functional teams in a collaborative review process to gain a 360-degree perspective can help uncover hidden inefficiencies and pave the way for a smoother year-end close in the future.