Year-end tax checklist for small businesses

Your financial year-end doesn't have to be a stressful rush. If you start preparing a couple of months ahead, you can give your accountant clean records, avoid penalties and possibly spot legitimate ways to reduce your tax bill. Use this checklist as a starting point and adapt it with your adviser, because the details depend on where you operate and how your business is set up.

The checklist

Get your records in order. Make sure every bank, credit card and payment account is reconciled up to date. Clear out uncategorised transactions, attach missing receipts and confirm that personal and business spending haven't been mixed. Review your unpaid invoices and write off any that genuinely won't be collected, following the rules that apply where you are.

Review assets, stock and liabilities. List any equipment, vehicles or software you bought this year, since these may be treated differently from everyday expenses. If you hold inventory, plan a stock count close to year-end. Check loan balances, outstanding bills and any amounts owed to or by the owners so your balance sheet reflects reality.

Check payroll and contractor records. Confirm that payroll totals agree with what you've reported and paid to the authorities during the year. Gather the details you'll need for any year-end employee or contractor reporting. Deadlines and forms differ by country, so confirm them early.

Plan ahead with your accountant. Ask whether the timing of certain purchases, pension or retirement contributions, or other decisions could affect your tax position. The right choices depend entirely on your jurisdiction and circumstances, so take advice before acting. Note the deadlines for filing and paying so nothing slips.

The best year-end I've had was the one where we'd reconciled every month. My accountant had nothing to chase, and I had nothing to dread.

Set up next year for success

Once the year is closed, lock the prior period, set a budget for the new year and put your tax deadlines in the calendar. Entirova's reports, audit trail and accountant access let you hand over a tidy, complete set of books in a few clicks.