Financial Statement Preparation Workflow

**Estimated Time:** 7-10 business days | **Difficulty:** Intermediate | **Team Size:** 2-4 people A structured 8-step process for preparing accurate financial statements including cash flow statements, balance sheets, and income statements. This workflow ensures compliance with GAAP and IFRS accounting standards, proper documentation with audit trails, and timely stakeholder distribution. Covers the complete cycle from source document collection through management approval. **Best For:** Finance teams, accountants, controllers, and CFOs managing monthly, quarterly, or annual reporting cycles. Essential for organizations requiring reliable financial reporting with proper internal controls.

8 steps

Accounting statements

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Process steps

Gather financial source documents and trial balance

2 day from previous step

task

Collect all required financial records including general ledger exports, bank reconciliations, accounts receivable aging reports, and accounts payable reports. Export the unadjusted trial balance from your accounting system. Verify all transactions through the reporting period close date are recorded. Document any missing items immediately - gaps at this stage cause significant delays in statement preparation.

Record adjusting journal entries for period-end

3 day from previous step

task

Review and post all period-end adjusting entries including accrued expenses, prepaid expense amortization, depreciation and amortization, inventory adjustments, and revenue recognition corrections. Each adjusting entry must have proper supporting documentation attached. Verify all entries balance (debits equal credits) before proceeding to the adjusted trial balance.

Run adjusted trial balance report

4 day from previous step

task

Generate the adjusted trial balance after all adjusting entries are posted. Confirm total debits equal total credits. Compare key account balances against prior period and budget to identify any significant variances requiring investigation. This adjusted trial balance serves as the foundation for preparing all three financial statements.

Classify accounts into financial statement categories

5 day from previous step

task

Map each account from the adjusted trial balance to the appropriate financial statement line item. For income statements: categorize into revenue, cost of goods sold, operating expenses, and other income/expenses. For balance sheets: classify as current assets, non-current assets, current liabilities, long-term liabilities, or equity. For cash flow statements: identify operating, investing, and financing activities.

Perform accuracy checks and reconcile statement totals

6 day from previous step

task

Verify all accounts are included and properly classified in the draft statements. Confirm the balance sheet balances (assets equal liabilities plus equity). Verify net income on the income statement matches the change in retained earnings. Reconcile cash flow statement ending balance to balance sheet cash. Investigate any variances exceeding 5% from prior period or budget.

Format statements per GAAP or IFRS standards

7 day from previous step

task

Apply appropriate formatting based on applicable standards - US GAAP, IFRS, or internal reporting requirements. Add consistent section headers, statement titles, and company identification. Include reporting period dates and comparative prior period columns. Format numbers with proper decimal places, currency symbols, and thousands separators. Ensure professional presentation suitable for external distribution.

Prepare footnotes and financial statement disclosures

8 day from previous step

task

Draft comprehensive footnotes covering significant accounting policies, basis of presentation, and specific disclosures required by GAAP or IFRS. Include notes on related party transactions, contingent liabilities, subsequent events, and segment reporting if applicable. Disclose any changes in accounting methods or estimates. Footnotes must provide sufficient context for readers to properly interpret the financial statements.

Obtain CFO approval and distribute to stakeholders

10 day from previous step

task

Submit complete financial statement package to the CFO or controller for final review and approval. Address any review comments and obtain written sign-off. Distribute approved statements to required stakeholders including board of directors, investors, lenders, and external auditors per established distribution list. Log distribution date and recipients to maintain complete audit trail for compliance purposes.