As the temperatures start to cool (even in California), the leaves on the trees are turning beautiful colors. And we’re also turning the corner to the new year. I believe December is our most important accounting month of the year. It’s a fast-paced, in-between month where we all have a short window for getting retrospective while also setting up goals for the year ahead. This is especially true for small businesses.

No matter how resource strapped a company may be, there’s a need for finance and accounting teams to pile on thoughtful planning this time of year. And they have to do it while also keeping a tight ship and taking care of routine tasks. Any cracks will show: The smaller the organization, the more of an impact each person has. After all, the accounting departments in smaller companies set the tone and structure for the rest of the organization to follow.

Hit all the must-do activities below, and you’ll be able to leave the year behind with a clean slate. Then you can toast to the finance team’s move toward a successful run next year.

1. Huddle with other department heads

This is the time of year when you need to get a grasp on budget management and plan accordingly. It’s that tense time when what has been spent or not spent comes to a head. Have a meeting of the minds with other leaders in the company after running reports that reflect actual expenses thus far, review the results, and see what the immediate plans are for keeping within the budget.

Most companies still have a “use it or lose it” approach to their budgets, which can lead to a mad scramble by anyone who has been slow in launching their programs until this point. If you get the sense that anyone is madly spending money just to spend money before the year closes, consider offering to freeze the unused budget so the funds can be used wisely next year. Consider sending out a reminder to employees to submit expense reports on-time, too—that’s a surefire way to spur an increase in activity.

Also ask all key vendors for up-to-date statements to see that you have accounted for all the billing activities. Nothing is more depressing than having a department head hand you a large invoice in January that you should have received in December. Make this time even more efficient by double-checking that you have all W-9 information from vendors that will receive a 1099 from your company—why wait until the next year if you’re contacting them now anyway?

2. Get in cleanup mode

It’s time to dust off all those maintenance projects you meant to do as the year progressed. The time for excuses is long gone! Turn your files upside down and shake them around until the cobwebs fall out. Are there old customer accounts clogging up your system? Dormant bank accounts? Redundant information for vendors? Before you close the year, you’ll also need to review your chart of accounts. And you’ll want to put any finishing touches on the annual budget and any strategy you have for how your team will carry it through in the new year.

3. Touch base with your auditors

We know it is tempting to procrastinate, but anything you can do to prepare for your upcoming reviews ahead of time will save you grief later on. All too often, auditors arrive expecting to see the schedules and files they expected and requested but their client is still in the process of completing schedules and gathering information. Be an exception and start the audit off on the right foot. Check in and see if you can get the client assistance schedule ahead well in advance and mutually agree to fieldwork dates. Also take a look at any deadlines you may face for reports that are due to lenders. (For more about prepping for your year-end audit, check out this blog by my colleague Monica Zorn.)

4. Review your staffing levels

December tends to be a rather inactive month for hiring, but it’s a time of year when finance could certainly use some extra hands. Who has time for sorting through résumés right now? With the holidays looming, hiring managers and potential employee candidates have a tough time getting on each other’s schedules, and most just aren’t into it at the moment. For now, plan for the holes ahead, including the busy times and vacation periods, by looking to outside consultants to help fill the gaps. You don’t want to burn anyone out and have to look for yet another job candidate when the new year rolls around. That wouldn’t be a fun way to kick off 2015.

5. Love the ones you’re with

December is filled with holidays and the natural push and pull between work and family life. As employees reflect back on where they’ve been and where they’re going in their professional and personal lives, take a moment to thank them for their hard work and their dedication. The majority of employees—nearly 80 percent—said they would work harder if they got the appreciation and recognition they think they deserve, according to a survey by Globoforce, a human capital management company. Another reason to extend recognition this time of year (or anytime for that matter): It’s the right thing to do.

Get through this list, and you’ll be starting 2015 off right!

Steve Jackson, a member of the RoseRyan dream team, has expertise in the areas of revenue recognition, SOX, systems implementation, budgeting, financial analysis, and process improvements, among others. He has worked at public accounting firms and corporate finance departments for over 30 years. 

In my pre–Sarbanes-Oxley days, I worked with companies where it was tough to get audit committee members to attend meetings, and many of those meetings were check-the-box exercises without real value. The Sarbanes-Oxley Act changed the landscape significantly. Among other things, SOX clearly laid the responsibility for overseeing external audits on the shoulders of the audit committee—and now we are seeing increased focus on how the audit committee manages the external auditor.

Two documents recently issued by the SOX-created Public Company Accounting Oversight Board, which oversees the audits of public companies, focus on one aspect of that management: communication. The first, AS 16, Communications with Audit Committees, is aimed at increasing the relevance and quality of communication between audit committees and external audit firms. The second, Release No. 2012-003, Information for Audit Committees about the PCAOB Inspection Process, provides guidance on conversations that audit committees may wish to have with their external auditors.

A little background may be helpful. Each year, the PCAOB conducts inspections of audit firms. These inspections ascertain how the firms under review conducted their audits—in essence, whether their audit opinions were sufficiently supported by the facts. They also determine how committed the firms are to quality control—basically, whether they meet professional standards.

Release No. 2012-003 suggests some questions for an audit committee to ask its external auditor, including the following:

  • Has my audit been selected for a PCAOB review?
  • Have other companies similar to my business been selected for review?
  • What issues did these reviews raise?
  • What were the review findings?
  • If deficiencies were uncovered, how is the audit firm remediating them, and how will those efforts affect our company?

Be skeptical if your external auditor suggests that an issue identified was a documentation problem or a matter of professional judgment. You may find it difficult to imagine that your auditor did not gather sufficient evidence to form an opinion when your management team feels like it’s being audited to death—but perhaps this is an opportunity for some candid discussion. A benefit of talking with your auditor about the PCAOB inspection results is to gain more insight about issues the PCAOB is seeing across the profession, and to learn how you might be impacted by those issues and ways to get a leg up on proactively addressing them.

Audit committees are becoming more proactive in managing relationships with external auditors and in evaluating auditor performance—think quality of services and adequacy of resources. Ensuring the audit firm’s independence, objectivity and professional skepticism hinges on good communication.