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.
Here’s what we cover:
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’ll 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 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.
Some year end tasks
Here are some tasks that should be considered as year-end approaches:
Check turnover for VAT
If you’re not VAT-registered, check your turnover to ensure your business hasn’t (or soon will) cross the VAT thresholds.
These are €75,000 if selling goods, or €37,500 if selling only services. If you’ve crossed the thresholds, or will soon, you must register for VAT with Revenue.
Of course, checking your turnover really needs to be a year-round task, rather than just at year end. If in doubt, speak to an accountant or tax adviser.
Payroll year end
The final payroll brings a handful of extra tasks, such as checking to see if you have an extra pay period, and notifying employees their end-of-year reports are available via Revenue’s myAccount service.
Check COVID-19 support schemes
If you haven’t already, use the year end as an opportunity to ensure you’re complying with—and taking full advantage of—any Revenue’s COVID-19 support schemes, such as the Business Resumption Support Scheme (BRSS) and the Employment Wage Subsidy Scheme (EWSS)
How to make managing your financial year end easier
Now you have all your financial data available, it’s a perfect time to bring in some outside help to create plans for growth so you continue to have a relevant vision of the future.
You can produce annual accounts on your own or you may choose to pay an accountant (or use specialist consultants).
The accountant 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, 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.
Editor’s note: This article was first published in December 2018 and has been updated for relevance.
7 ways to take control of your business
Want to know how you can boss it at your business? Read this guide for top tips to help you master your business admin and truly take control.
Recommended Next Read
Retained earnings: What they are and how to account for them
Subscribe to the Sage Advice newsletter
Join 1.5 million subscribers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.