Administer Ajankohtaista Artikkeli The time for financial statements is approaching – remember these things.

The time for financial statements is approaching – remember these things.

The time for financial statements is approaching – remember these things.

Sales and purchases should be in order before the end of the financial year

Most Finnish companies end their financial year at the turn of the year, but for thousands of companies, it’s relevant at some other point in the year. It’s advisable to start preparing the financial statements about a month before the end of the financial year.

All material related to the ending financial year that affects the financial statements must be submitted to the accountant. This includes receipts, invoices, and other written documents. Many companies regularly provide them to the accountant during the financial year, as desired, but it’s recommended to check the situation before the turn of the year. For example, employees may need a reminder about expense reports.

Next, sales invoices should be checked. All work done and sales made during the year must be invoiced by the end of the financial year. In this context, it’s also good to see how many overdue sales invoices there are and consider how to collect them.

“If there are very old invoices from which no money has been received, it may be necessary to make a credit loss entry,” advises Administer’s Service Manager Britt Mäkinen.


Matching Expenses

To ensure that the company’s result looks correct, sales and expenses must match. Expenses must be allocated according to the month in which the invoice transaction occurred. Billing is also crucial for taxation.

“For example, if purchase invoices are missing from the accounting, the company pays too much taxes when all expenses are not deducted,” Mäkinen points out.

If a purchase invoice goes partially or entirely into the next financial year, the invoice must be spread proportionally over the next financial year. According to Mäkinen, the classification depends on the amount of the invoice; whether it is essential for the result or not.

Another option is to spread the cost. For instance, a leasing payment may be for the three-month period from January 1, 2022, to March 1, 2022. In this case, the one-month share must be allocated to the ending financial year, and the two months to the next financial year. Rent and interest costs are always spread as an expense for the right year.

Your own accountant can help and advise on which costs that extend beyond the financial year should be considered in the financial statements.


Examine the result and taxation

If the company has inventories, an inventory must be done for the financial statements to determine the value of the stock. A dated and signed inventory list with acquisition costs must be prepared for the property in stock.

The accountant also needs, among other things, minutes of board meetings and other possible documents related to the company’s business.

It’s advisable to prepare the financial statements well in advance so that they are ready on time. If the accountant does not have all the necessary material, Mäkinen points out that the financial statements may not give the correct image of the company’s situation, as required by the Accounting Act.

The financial statements of a limited company must be completed within four months of the end of the financial year so that the company has time to submit the tax return on time. Delays in filing the tax return mean sanctions from the tax authorities.

Before the end of the year, it’s worthwhile for entrepreneurs to look at the result of the ending financial year and check if the advance taxes have been paid in the right amount. If too little advance tax has been paid, it’s possible to apply for additional advance tax after the tax year.

Entrepreneur-owners should also consider optimizing taxes at the turn of the year, such as the question of salary versus dividends. The decision on the distribution of dividends is made when the result of the past financial year is seen. Mäkinen reminds that in small and medium-sized enterprises, the right ratio of dividends and salary can bring tax benefits.

When the financial statements are ready, it’s important, according to Mäkinen, to go through them with the accountant. This way, areas for improvement can be identified. To ensure that the company gets all the essential information from financial figures, we have also created the Faktum service, where operations are analyzed on a more detailed level over several years.

“Entrepreneurs should naturally be interested in their own business. Companies should also look at their financial figures over a longer period to be able to develop their business in the right direction.”

To prepare for the financial statements, at least the following information must be provided:

  • Receipts and other documents
  • Missing purchase and sales invoices
  • Expense reports
  • Inventory
  • Balance and collateral certificates from the bank
  • Leasing agreements
  • Cash bookkeeping for cash
  • Minutes of board meetings


Need more information about interpreting financial statements or generally managing your company’s finances? Feel free to contact us, and let’s explore together how we can help your business succeed.

You can leave us a contact request or contact directly our financial management expert Ville Halonen, or +358 40 651 2554