If your business has a financial year ending December 31st then many of us will be looking to close off our last financial year. Getting everything in place and making sure that all is accounted for prior to producing your year end accounts can be a bit of a logistical nightmare. Waiting for invoices to come in, expenses from staff, late payroll adjustments, accruals etc all have to be accounted for so it’s good to have a checklist to work against so, here’s a few pointers for you…
Year End Checklist
Sales – make sure all sales invoicing for the previous year has been completed and dated accordingly, it’s an easy mistake to make dating a December invoice with a January date. Any work that is still being completed and not yet charged can be treated as work in progress so a provision can be made for this in your accounts.
Cost of sales – likewise any costs relating to sales that have taken place and the cost of these sales yet to be charged. It could be that you’re waiting for an invoice from your supplier, this cost will need to be accrued for in your accounts.
Bank reconciliation – this is very important, making sure all your bank accounts are fully reconciled is normally one of the first areas to be checked, with cloud accounting systems the bank statement can be loaded and checked against your transactions making it a quick and easy process to complete.
Expenses – if your staff have incurred expenses on behalf of the company then you may well have employee expense sheets to enter, making sure you obtain all expenses prior to closing off your year-end accounts is vital so it’s a good idea to send an email round giving them a cut-off date for submission.
Payroll – any late payroll adjustments must be entered, you may well have commission payments to make relating to 2019 that will be paid in 2020 so these can be accrued for along with any employer costs.
Prepayments – you may have been charged for items within 2019 that actually relate to 2020, for example rates, rent etc. these can be set aside and proportioned for the new year.
Accruals – likewise you may have accrued for items within 2019 that have now been charged so make sure that the balance in your accrual account reflects items that you have still yet to be invoiced for.
Depreciation – make sure any assets you may have sat on your balance sheet have been depreciated accordingly and the net book balance reflects the correct amount.
Balance sheet – a reconciled balance sheet is a key procedure of accounting so make sure that all balance sheet accounts are reconciled and documented, agreeing your interco. accounts, loan accounts, accounts receivable and payable, outstanding HMRC payments are all part of year end procedures and will make for happy auditing should this be a requirement within your company.