Year end can be a stressful time, but with the help of a good accountant, the vast majority of the work can be completed on your behalf, while you get on with other areas of the business.
Reconciling Your Accounts
The first step is to reconcile your accounts to your bank statements. Your accountant will ‘trace’ through all your transactions and check that they have all been correctly coded and entered. Any discrepancies will need to be investigated and cleared up as soon as possible in order to ensure that your final figures are correct.
Preparing Statutory Accounts
For limited companies, the accounts must be prepared in accordance with certain legal rules (GAAP). The way that income is treated, assets and liabilities are shown on the balance sheet, etc. are all governed by these rules. An accountant will ensure that the Statutory Accounts are prepared and filed with Companies House in the correct format by the relevant deadline.
Calculating Corporation Tax
Your corporation tax liability is then calculated from the accounts and a CT600 return prepared and submitted to HMRC for you. This involves adjusting your accounting profit for items which receive special treatment for tax purposes.
Identifying Allowable Expenses and Reliefs
Relief on your costs that your accountant can identify include capital allowances on equipment that your business uses and possibly research and development (R&D) relief on work your company has done. Many business owners fail to claim the maximum amount of relief available on allowable expenses as they are not aware of all of the reliefs that can be claimed.
More on Stroud Accountants can be found at www.randall-payne.co.uk/services/accountancy/stroud-accountants/.
Planning Ahead for Next Year
Using the end of year as a starting point to plan for future years allows your accountant to advise on the most tax efficient method of paying yourself i.e. a split between salary and dividends. This can ensure that you are not leaving it until the last minute and rushing into a decision.
Accounting at year end, effectively, is about establishing a clear understanding of the current state of your business and equipping you to take effective action in the coming year.