In this article we will make it easy and use December as the year end. But any year end date will need the same work done. With one month to go before the year end, you should

1. Agree your November Supplier (Creditor) Balances

Get your suppliers statement for November and compare it to their account on your computer system. Check to see if any invoices, credit notes or payments are missing. Check to see that the amounts of each Invoice, Credit Note and Payment agree with your system.

a. If you are missing an invoice your costs are understated and you will not have claimed back the VAT on the purchase invoice

b. If you are missing a payment, you maybe overpaying the supplier and putting pressure on your cashflow.

c. If there are small balances e.g. 1 cent, 2 cent balances, then write them off as discount.

 

If you need copy invoices or credit notes from your supplier because you are missing them, don't just phone their accounts department. Phone and fax them a list of all the invoices and credit notes with the dates and invoice numbers and values. This makes it easier for them to find the invoices and credit notes you need.

 

2. Look at your Aged Debtors (Customers) Report and ask yourself will I get paid for these amounts that are owed.

a. If an invoice is very old, is it a b a d  d e b t? If it is a b a d  d e b t, then issue a credit note and claim the VAT back on it.

b. If there is a small balance e.g. 2 or 3 euro write it off and this will stop it coming out on your aged debtors report.

c. For every balance on your accounts system, you are probably sending out a statement. Each statement requires you to use an envelope and a stamp and your time to put the statement in the envelope and bring it to the post box.

 

3. Look at your Stock balances. Do you have these quantities in stock?

a. If the stock is not there, then write it down (adjust it) to the amount you actually have.

b. Check the valuation of the stock. Is the valuation up to date and give a true value of the stock.

c. How old is the stock? How long has it been there for? Can you sell it? Should you throw it out?

 

4. Look at your Profit & Loss account.

a. Are the costs entered in to the correct nominal accounts.

b. Are cost of sales in cost of sales accounts or could they be misposted. A common error in a printing company is to treat A4 paper as an office cost when in fact it is used in the printing process. Do you buy items that could be used as a cost of sales as well as an office expense and so is it posted to the correct nominal expense account?

c. Some expenditure should not appear in the Profit & Loss account. For example, repairs to buildings should be treated as an asset and not as a repair expense. The purchase or computers are not computer expenses but fixed asset additions.

 

Other things to do:

5. Prepare a bank reconciliation statement

6. Examine your Balance sheet

7. Make sure you have all your bank statements for the year

8. Make sure you have all your lease, loan and hire purchase agreements

9. If paying VAT or PAYE/PRSI by fixed installments, make sure that you will not end up underpaying the annual amount due to the Revenue Commissioners (Tax Man)

10. Check that you know how to produce a stock take sheet for the year end stock take