10 things to check before financial year end
A large proportion of businesses have December as their Accounting and Financial Year End – so it’s the right time to check back on what needs to be done. During the preparation of Annual Accounts, you may uncover opportunities that arose during the year, save you some tax or just simply make your company more efficient so that you can concentrate on growing your business.
To make it a little easier for you, we’ve drawn up a list of 10 key things which are worth checking now…
Financial year end checklist
1. If you are in the lucky position that your business is performing well, it is a great time to check your salary – have you used all of your tax-free allowance for last year? Have you utilised your standard rate band? Could you issue tax-free vouchers to yourself as an end of year bonus?
2. It is also a great time to check if your company should contribute to a pension on your behalf. If your accounting period end is 31 December any pension contribution you intend to pay must be paid before 31 December to get a deduction in your accounts. If you employ your spouse in your business, you can make an employer contribution for him/her.
3. Have you claimed all mileage and expenses from your limited company? If not, it is a good time to make sure this is up to date.
4. Before Financial Year End, you should review records to check that Vat has been claimed correctly, especially in relation to invoices that remain unpaid after six months.
5. Do you have stock? If so – you should do a physical stock take at the year-end.
6. Do you have work in progress? If so – you should note all work in progress at the year-end.
7. Retain all of your bank statements, loan accounts, hire purchase accounts etc at 31 December.
8. If you do not operate any accounting software, you should note debtors, creditors, cash on hand and bad debts at the year-end. Write off any bad debts that are no longer reasonably recoverable.
9. If you do use accounting software, this should be done for you but you should check it for accuracy.
10. Finally, making sure your accountant has your complete records early in the New Year will ensure you know early how much tax you have to pay next year!