Year-end preparation for limited companies: Your checklist to smoothly end the fiscal year

Oct 9, 2024 | Uncategorized

It may seem like the end of the fiscal year is far away, but you’ll know that when running a company, you can’t afford to think like that. Getting started as early as possible with your year-end preparation is always in your best interests, so here’s a checklist you can use to smoothly end the year. If you’d like more information on any one suggestion, don’t hesitate to get in touch with us.

1: Review financial records

You can begin by conducting a thorough review of your financial records, especially your income statements, balance sheets and cashflow statements to assess the financial health of your company. You should also be on the lookout for any discrepancies or unusual transactions that need to be addressed.

2: Ensure all invoices and expenses are recorded

You should also ensure that all your invoices and expenses have been accurately recorded. Also check your sales and purchase ledgers to confirm that all transactions are accounted for. After all, any unrecorded income or expenses can lead to an inaccurate financial picture and potential issues with HMRC.

3: Reconcile your bank accounts

Reconciling your bank accounts is a critical step in the year-end preparation process. Specifically, this involves you comparing bank statements with your internal records to identify and rectify any discrepancies.

Such a process ensures that your cash balance accurately reflects your company’s financial situation. It also helps prevent fraud and simple errors, making it easier to maintain accurate financial records.

You may want to consider reconciling your bank on a regular basis – perhaps monthly – throughout the year to avoid a last-minute rush at the end of the year-end. Cloud accounting software is an excellent tool for bank reconciliation, automating the entire process to save you time and reduce the chance of error.

4: Calculate your approximate tax liability

Once you’ve reviewed your financial data and reconciled it all with your bank accounts, you can then begin to estimate your corporation tax by applying the appropriate tax rate (and marginal relief) to your profits. This will give you an indication of what you may owe so you can save and prepare for the tax bill.

Accurate tax calculations will, of course, take into account any tax reliefs of allowances you may be eligible for, such as the annual investment allowance or research and development (R&D) tax credits.

5: Submit your tax return

Now it’s time to submit your tax return. In the UK, limited companies must file their corporation tax return (CT600) within 12 months of the end of their accounting period.

Make sure that all information is accurate and complete to avoid delays or penalties, and consider using accounting software to automate this process and reduce the risk of errors.

6: Emphasise accurate record-keeping for the next fiscal year

Year end can be frustrating for business leaders. The main reason for that is the culmination of months of poor record-keeping resulting in directors scrambling to find a wealth of records and documents hidden away in drawers and filing cabinets. If that sounds familiar, make sure it doesn’t happen again next time.

There’s no trick to good record-keeping beyond discipline and habit. That said, cloud accounting software is an especially useful tool, as it drastically reduces the amount of paper you’ll use, and automatically categorises financial information according to rules determined to you. It can be a great timesaver – and lifesaver too.

7: Work with an accountant

While the year end can be managed internally, engaging an accountant can provide invaluable support, as an experienced accountant will help ensure that your financial records are accurate, assist in tax calculations and provide insights that can enhance your business strategy.

They are also well versed in current tax laws and can help you identify potential deductions and allowances you may have overlooked. Ultimately, they will save you time and money, allowing you to focus on growing your business. Sounds good, doesn’t it?

If you’re looking for an accountant who can help you with year-end preparation, get in touch with us. Let’s see how we can help.

Ready to go? We’re excited to hear from you.

Let’s get started, as soon as you’re ready. We’re always up for a chat about how we can support you and your business.

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