Your go-to year-end accounts checklist

What is a year-end accounts checklist?

Closing off the financial year for your business involves lots of specific tasks, each of which need to be completed accurately and on time

It’s important that everything is checked and that any loose ends are tied up before the financial period is closed.

Using a year-end accounts checklist can really make a difference as it focuses everyone’s mind on the job in hand, and ensures nothing gets missed.

We’ve prepared an easy to use end-of-financial-year (EOFY) checklist to help you and your team organise what needs to be done.

Why year-end accounts matter

It’s that time of year again - when every business checks that their year-end accounts and records are all in order, creates statements of the year-end position, and conducts a comprehensive financial reporting process.

Once all this is complete, the leadership team can make robust decisions and plans, and Finance can feel confident that legislative responsibilities have been met correctly, on time, and without penalty. There’s a lot to get through!

Tips to simplify the financial year end process

Year-end can be a stressful time so you need the whole team to be ready. Find out more about what to do to prepare your finance team for year-end.

And don’t forget that the groundwork you do in advance can make all the difference – such as closing each monthly financial period properly throughout the year so that discrepancies are picked up early on. Use our month-end checklist for easy reference going forwards.

Your 10-step Year-end Accounts Checklist

Your goal is to identify and resolve any irregularities, ensure everything balances, and then close off the year. The EOFY checklist below outlines 10 key areas to cover.

1. Process employee bonuses

If you’re giving annual bonuses, don’t forget that these are subject to income tax. Alternatively, if you decide to wait and pay bonuses after year-end, you can accrue for employers’ national insurance costs as well as the bonus and reverse when the payment is made. It means the cost is included in the correct financial year; it may also lower the company corporation tax bill.

2. Safeguard cash balances

Consider postponing payments to suppliers by a short period to keep cash balances as high as possible for year-end. While supplier liability will be logged on the balance sheet, a higher cash balance is preferable and helps to improve credit agency ratios. Do take care to maintain open communication with your suppliers and safeguard cash balances whenever possible.

3. Employee expenses

All employee expenses (including any home working expenses) must be processed before the end of the financial year and included in costings for the correct tax year. This will help to reduce your corporation tax liability.

4. Review control accounts

Review wages, PAYE, pension and VAT control accounts and ensure they reflect accurate liability positions. Also check prepayments, accruals and deferred income. If your balance sheet is incorrect, your profit and loss account record is likely to be incorrect too.

5. Balance sheet analysis and profit and loss

Use your accounting software to generate a balance sheet and profit and loss reports and then spend some time analysing and identifying what your business did well, what requires more attention, and where improvements can be made.

6. Cash flow analysis

Accounting software makes it easy to create a cash flow statement. Use this to analyse and forecast, taking into account upcoming company plans as well as any changing legislation on the horizon.

7. Corporation tax estimation

Calculate an accurate estimate of the corporation tax liability using the applicable rate and include this in your cash flow forecast.

8. Tax payment extensions

Decide whether a tax payment extension will be needed. If it is, you will need to consult HMRC (as soon as possible) to avoid having to pay a penalty.

9. Client list review

Ensure the contact information you have for your current client list is up-to-date and delete any unnecessary data in line with your GDPR responsibilities. Year-end is also a great opportunity to thank your clients for their business and look forward to the new year.

10. Set goals for next year

Take time to review performance against goals for the last financial year, taking into account the factors that had a positive or negative impact on the outcomes. With this as context, you can now set new objectives for the coming year in line with business plans and goals.

Download the year-end accounts checklist so you can easily tick off each step at the end of each year.

How our accounting software can ease your financial year-end process

Use our accounting software to streamline and automate your complex accounting processes to ensure every month-end and year-end runs smoothly. View our accounting software.