Year-end accounts, or annual accounts, are produced using a business’s financial records at the end of an accounting period. They give an overview of the business’s financial situation, providing insights for decision-makers about what financial resources are available, what activities are financially over or underperforming, and opportunities for efficiencies to be identified and made. They also allow for more robust business planning, showing a clearer financial picture that potential expansion can be factored into.
Here are some essential things to consider when doing your year-end accounts.
1. Collate all documentation
When accounting for year-end, your accountant will need all information pertaining to that financial year, and therefore all records and documentation must be compiled for review.
Examples of required documents would include:
- Cash records
- Bank and credit card statements
- Loan information
- Sales records
- Payroll information
Financial software can allow for all this information to be extracted much more easily if all records are properly kept or accounts are linked to the software itself. Xero is a good option for businesses of all sizes, and J Sweeney Accountants can assist with its implementation.
2. Chase up unpaid invoices
It is important to chase up all unpaid invoices as it helps to understand the true financial state of the business and report the strongest earnings possible. If the debtor is unable to pay, then it can be wise to set up a payment plan so that some of the money can be accounted for in your annual accounting process.
3. Work out corporation tax liabilities
Corporation tax is a tax on the profits made by a business over the financial year, and is, therefore, one of the first actions to come out of the year-end accounting process. Currently, the rate for corporation tax for small businesses is 19%. In this case, small businesses are defined as those with profits under £50,000.
J Sweeney Accountants can assist with all your year-end accounting needs, including corporation tax liabilities. Discover how we can support your small business. Give us a call at 01604 950034 or contact us here.