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Why the financial closing statement is important?

by Clare Louise

Regardless of the financial sophistication of a company or its size, the financial close process becomes convoluted. For evaluating the ปิดงบการเงิน currently there a proper level of sequential flow has to be taken into consideration and each report must be correct. The closing statement is used for describing all the accounting process that directly gets triggered at your office. It is also used for predicting out the quarter, month, or year.

The companies that hold up the multiple subsidiaries would include the consolidating divisions and this analysis was issued for eliminating the post-closing based adjustment. It is not a single chain process, for making the account zero that is to get tally there one has to undergo a lot of steps and process that includes,

  • Identifying the transaction history. It should be proper and accurate.
  • The transaction must be kept recorded in the journals.
  • Posting the same in the ledger.
  • The preparation of unadjusted entries from the journal’s trial balance.
  • Reconciling the credits and debits score.
  • Adjusting the journal entries.
  • Running out the trial adjustment.
  • Financial statement and finally it will be closed to zero for resetting out the process.

It works like a cyclic process. These statements might also be required for the external stake members like the investors, regulatory agencies, and lenders.

Difference between the financial close and closing book

In some finance, they make use of these both terms. However, it is considered as the main key distinction feature.

The term financial close reflects the broad terms that are used for reflecting the accounting process but are not limited to its closing book. It encompasses the entire cycle of accounting.

The last step in the financial close process holds two objectives. The first term represents closing the book and resetting its emperor accounts to zero and there it locks the prior in the periodic balance sheet. The second one is that its net value results would get transferred directly to the balance sheet.

Key factors

  • ปิดงบการเงิน is a single long chain. It should be properly done if not there are chances for the delay and complexity to arise.
  • The process improvements can be combined using the automated accounting software that helps entirely close the financial.

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