5 Checks before you submit your accounts (year-end accounts checklist)

5 Checks before you submit your accounts – year-end accounts checklist

If you don’t get your numbers right you may be declaring either too much profit or too little. Which means your tax will be incorrect. If you don’t do sense check of your numbers, there may be anomalies in the accounts that could cause HMRC to start an enquiry into your accounts.

To avoid future headaches, here’s a very basic check lists you can use to double check your numbers before you submit it to Companies House and HMRC.

  1. Reconcile Bank accounts

Have you made sure that the balance in the bank matches with your bank account balance in the accounts? E.g. if according to the current account bank statement your balance was £5,000 as at 31st of March 202X, but the balance sheet has it as £10,000 then either you should have a good explanation or your need to check for a) missing transaction/unposted transactions, b) duplicates, c) transposition errors, or d) dr/cr error i.e. a receipt amount being entered incorrectly as payment

  1. Aged Debtors / Credit Sales

Check that the balance outstanding from your customers is accurate.

If you enter duplicate invoices, you will end up paying too much tax. Likewise, if you received cash but didn’t create an invoice, or gave discount or refund but didn’t create a Credit note, your Sales figures will be incorrect.

At this point, you can also check very old debt and if they have become irrecoverable you can provide for bad debts and thus reduce your profit/tax liability.

  1. Aged Creditors / Credit purchases

As above, worth checking what’s still showing as outstanding to pay at the end of the year. There can be duplicate entries or overpayments showing in this report which you can adjust in the accounts. You may also find issue that will need resolving with your suppliers so it is worth checking this report on a regular basis during the year as well.

  1. Director Expenses

Owner Director of small businesses are frequently using their personal credit cards or bank cards to pay for the business. Any expense exclusively related to business can be claimed against the business. Check if you have included all such business expenses in your accounts.

  1. VAT Returns or VAT reconciliation

VAT reconciliation are actually more important for quarterly VAT returns in case you have over or under declared your VAT liability. You can check if e.g. Sales declared on your VAT returns match with Sales as per accounts. There are often some differences but can make a list of reasons for such differences e.g. sales that were outside the scope of vat, or differences due to different vat and accounting periods. However, if there were late sales entered or sale invoice issued with incorrect date you can miss out in reporting your VAT. Check if your software picks up late entries in your VAT return. For example, vat return for quarter ending March was submitted but then some old purchase invoices were not posted and thus vat not claimed.

For a more detailed checklist please also checkout our blog post: https://accountstemplate.co.uk/blog-article/year-end-accounts-check-list-small-businesses