How to prepare for your financial year end
The financial year end is fast approaching, making it essential for businesses to get their accounts in order. Taking a few key steps now will help make the process much more streamlined when it comes to sending the necessary information across to HMRC.
Micross Logic have been helping businesses to streamline their accounting and finance operations for over 20 years, and have put together this useful guide for businesses preparing for their financial year end.
What is financial year end?
Financial year end refers to a report based on how your business has performed over the past 12 months. It is a legal requirement and analysed by HMRC, and it gives banks and other potential investors a clear idea of your business’ financial situation.
It’s also a great time to reflect on business performance over the past year, create realistic goals, and plan for the future of your company.
Planning ahead is crucial for getting financial data in order accurately and efficiently. With financial year end giving some employees extra work on top of their existing day-to-day tasks, creating a step-by-step guide of what needs to be completed along with deadline dates will help keep work more manageable.
Making sure your accounts are kept up to date is key for planning ahead. Every number in your financial accounts should correspond with invoices, bills, bank statements etc, making sure there are no anomalies.
Check your chart of accounts
Your chart of accounts identifies which accounts relate to your profit and loss report or balance sheet. They essentially control which accounts are cleared down for the new year, which makes it vital to ensure every bit of your financial data is correct.
Keep employee data updated
Payroll and expenses will also be scrutinised by HMRC, so it’s important to keep these records up to date. If there are any incorrect National Insurance and tax deductions, your business will be held responsible rather than the employee, making it imperative that these details are correct.
Keep files tidy
Ensure all business receipts, invoices, and statements are filed logically and somewhere they can be found easily, as it’s important to be prepared in case you’ll need to provide evidence if any of the information your send to HMRC is questioned.
Triple check and backup your data
When it comes to financial year end, there’s no such thing as over-checking your data. Taking the time now to make sure everything stays correct leading up to year end, will save substantial time later on.
If you use accounting software, most will have data checking functionality that will let you know if there are any anomalies with your numbers. Running these checks sooner rather than later will help you resolve any potential issues early. Backups of your data should also be taken once everything is correct, just in case you need to revert back to the original data in future.
Preparing for the financial year end doesn’t have to be a hassle, enterprise resource planning (ERP) software has been designed to make the process easier and more efficient, along with other accounting and finance operations. Making tax digital (MTD) and HMRC compliancy are common features of ERP software, meaning businesses don’t have to worry about the long and laborious manual tasks associated with financial year end.
Financial year ends are always a stressful time for businesses, so if you would like any further advice or guidance on how to make the process more efficient, please don’t hesitate to contact our experienced team by calling 03300 240688 or emailing info@localhost.