How to prepare for a stress-free year end

Posted on by Admin

The best time to prepare for a stress-free year end is nearly a year ago. Trite but true.  

But we are where we are so what can you do now? 

  • Make sure that all invoicing is up to date 
  • Make sure that you collect as much cash as possible from your clients. (See other articles on improving your cashflow and credit control procedures).  
  • Write off old, uncollectable debts to understand the true financial position 
  • Upload all purchase bills (next year you can start to add Hubdoc, Apron, or Dext so that you can do this as you go!) 
  • Chase the team for expenses 
  • Check for any draft sales invoices or purchase bills and either process them fully or delete them if necessary. 
  • Check for old, unpaid bills. Are these genuinely waiting to be paid or the result of a duplicate entry? (This often happens if the bank account is reconciled before uploading bills 
  • Reconcile the bank account (we hope you do this regularly anyway!) and chase VAT receipts for all payments 
  • Run a P&L by month and look for missing expenses each month such as 11 rent or software payments instead of 12. (Xenon Connect or Dext Precision software is great for this) 
  • Reconcile payroll to the accounts. Salaries should agree to payroll summary reports and balances owed to HMRC should agree to the business tax account 
  • Reconcile the final VAT return to the accounts and the business tax account. This is easiest if the VAT period is aligned with the year end. You can change your VAT period online in the business tax account. 
  • Review the Directors’ loan accounts (DLA) to make sure that they’re not overdrawn (and remind directors, yet again, not to keep helping themselves to company cash without declaring proper dividends!) 

Doing this early, and regularly, will help to make the year end easier. 

While you’re at it why not consider regular management accounts to provide a true financial position BEFORE directors draw money out of the business? It would save the company so much money on overdrawn DLAs leading to S455 penalty tax and tax/NI on P11D beneficial loans.