Make Year-end accounting quick
Do you find the closing process of a year to be an arduous event or a series of safe and predictable events? What if I told you that you could make a final closure faster and easier?
1. When to do these end-of-year checks
A fiscal year is 12 months. Your company works for 12 months, then the accounts must be closed, the financial statements prepared and the declarations of revenue filed.
Checkout here year end accounting checklist you need to go through.
The best time to make these accounting procedures is shortly after closing the month 12.
For example, let’s say your fiscal year works from January 1st, 2020 to December 31, 2020.
It is likely that in January 2021, you will reconcile and close your accounts for 2020 December.
Once these procedures are completed at the end of December, you can move on to these end-of-year procedures.
It is possible that you did not do much bookkeeping during the year and you are doing everything just now to file your tax returns.
Whatever the scene, read more to know what needs to be done.
2. Record and reconcile
Although it may seem obvious, but this is the first step to ensure that all transactions are up to date and complete, for the end of the year. This includes all existing invoices and bills, even if they still have to be paid. Examine all past documentation to make sure everything has been included. To facilitate this process, we recommend Hubdoc to electronically store all supporting documents because it keeps everything in the same place.
It is essential to ensure that all transactions you have saved in your accounting software correspond to your bank statements and your credit card statements. To do this, you will have to perform a bank reconciliation. Software such as Xero or QuickBooks Online will finish this task in less time.
3. What should I include in my statutory end-of-year accounts?
Complete end-of-year accounts include the following things:
Usually, your end-of-year accounts should contain the report of a director. This is a document written by the directors of the company, summarizing the performance of companies during the year with their point of view of its current position and on how they think it will be in future.
This gives details on the business’ assets and liabilities at the end of the accounting period.
Profit and loss (P & L)
The P & L account gives a summary of income and expenses and gives the total amount of profit or loss during the accounting period.
This is a comment and an explanation on the details of the income statement and the balance sheet.
HMRC or all the shareholders you have, require end-of-year accounts.
4. Keep employee data accurate
During the end of the year, you will need to make sure that all your job data is up-to-date and accurate. During the audit, HMRC almost always examines the payroll and expenses. They are always very interested in national insurance and tax. If any of this is not correct, as an employer, you will be responsible as opposed to the employee in question. You must also make sure that all your employees submit their expenses with all the correct revenue to avoid confusion.
If its too confusing for you then hire accounting services London.
5. Check all of your data and get a backup
Survival works to have emergency plans in the event of a disaster. You need a backup plan if your first plan fails and the same thing is true with the year ending accounts. If you have an ERP system like Dynamics GP, you can copy all your financial data. And if things happen while you make year-end accounting and you have to start from scratch – or start from a point where you know that the data is accurate, you can do it with GP.
Having a backup plan in general is a good idea.
The end of the year reports are the scourge of many financial departments, but it does not need to be as stressful and takes a long time. With a planning and preparation in advance, you can go ahead of the process and avoid last minute troubles. In addition, having the right software tools in place can eliminate manual processes and improve the accuracy of your end-of-year declaration. If you want to decide which software is better to use Xero or Quickbooks then go through this guide on Is xero better than quickbooks.