End Of Year Accounts – What is it? And what happens?
Financial Statements Preparation:
Preparing your financial business statements divulging of the balance sheet, profit and loss, and cash flow statement. These number gods summarise your financial performance both good and bad (you can’t go back now) and position over the last year.
Reconcile and analyse:
Bank accounts and credit card accounting records are added to your software, checked, and any problems that occur are identified and resolved. Your suppliers and customers are also analysed to ensure accuracy and follow-ups are made on any outstanding bills.
Inventory Assessment:
If your business deals with any stock inventory perform physical checks to ensure inventory matches up with the numbers in your accounts, ask your accountant to adjust the numbers accordingly if needed.
Depreciation:
Depreciation on your assets (the big stuff you buy for your business) will be calculated and recorded and any expenses for assets that have been used during the year. Your fixed asset register is then updated ready to start the next year going forward.
Accruals & Deferrals:
Make any accrued expenses (those accounted for but not paid yet) and defer revenue/expenses (anything paid to you in advance from customers)
Reviews of financial performance:
Take a look at your business’s performance over the last year, have you much profitability? Are you liquid? This will help you identify trends for the coming year and allow you to adjust your cash flow forecast to avoid any issues you may have overcome this past year.
Tax planning and the big C:
Review tax regulations and look at your tax liability for the year, based on last year what could it be once you have adjusted your targets for profitability? Can you prepare for this early? The big C, gather the documents you need and the information you may need to keep your tax filing compliant. Do you need to register for VAT or set up a PAYE scheme?
Budget and Forecast:
Reflect over a cuppa on how your business performed over your budget and forecasts you set this time last year. Did it go to plan? What worked? What didn’t work? Evaluate any significant problems and adjust your plans to accommodate the future.
Employee compensation/benefits:
Ensure all employee bonuses, benefits, and deductions are made and accurately recorded and reported to the relevant outlets.
Legal and regulatory compliance:
Ensure you are compliant with all relevant legal and regulatory requirements within your industry so no fines are to ruin your cashflow documentation!
Financial System Clean Up:
Review and reconcile all accounts, ask your accountant to do this for you, they’ll solve any discrepancies and correct them so the rolling amount falls into next year accurately.
Documentation:
Keep copies of the financial activities and decisions made at the year-end process.
Strategic planning:
Now the boring stuff is done, it's time to set upon the new chapter in front of us. Use your financial information to inform your strategic planning for the next year.
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