Want to get your business ready for your financial year end but not sure how to go about it? This article explains what your “year end” is and highlights the accounts you need to prepare.
What is your year end?
Your financial year end is a critical date on your business calendar. It’s when the fiscal year finishes for your business. Businesses have different financial year ends.
At your year end you will need to prepare annual accounts, detailing your sales, costs and profit/losses for the financial year. The figures in your yearly reports will help you to complete your corporation tax return.
If you own or run a limited company, by law, you or your accountant must prepare annual accounts and send them to Companies Registration Office and any shareholders.
You can also send a copy to affected parties such as your bank.
Selecting your financial year end
If you’re self-employed, you decide your business year end date. If you set up a company, Companies Registration Office will give you an accounting reference date to use for your business that will be at the end of the month, one year later.
After your first year end, the next one will automatically be a year later (unless you choose to change your year end).
Lots of companies choose 31 December for their financial year end to match the calendar year.
The date you pick can affect how soon you must pay tax on your profits, so you may want to take advice from a financial adviser on a date that suits your business best.
Year end accounts
The year end accounts you produce will depend on your requirements and those of the Companies Registration Office, Revenue and your shareholders or any lenders.
As standard your accounts include:
- a profit and loss (P&L) statement, showing how profitable your business was
- a cash flow statement, demonstrating how money passed into and out of your company
- a balance sheet, displaying your company’s financial position at its year end
Limited businesses must make sure that their accounts give the data required by the Companies Registration Office, in the correct format.
Smaller businesses don’t have to provide as much detail as larger ones.
Making it easy
You can produce annual accounts on your own or you may choose to pay an accountant. The latter option could save you time and give you confidence that your company’s accounts are in order.
An accountant might also be able to help you with tax planning and financial management for the next financial year at the same time.
Whether you use an accountant or not, you must make sure your accounting records provide all the required information.
It’s much simpler if you have a well organised, frequently updated accounting system, rather than having to order everything at your financial year end.
It helps if you can tidy up any loose ends in the run-up to your financial year end by chasing up missing receipts, paperwork and debts.
Where to get further help
Other businesses may be able to recommend an accountant. Another option might be a professional organisation such as Chartered Accountants Ireland.
Meanwhile, the Companies Registration Office offers further advice on the requirements for annual accounts and tax returns.