If you were told you had to have everything ready for your financial year-end tomorrow, what would you say?
Some of you are probably fine with that, and that’s because you actually have your financial year-end this month.
For the rest, you may have responded with confusion or fear as the prospect of gathering up the necessary information sent a shiver down your spine.
Why is an annual requirement such a scary prospect for so many businesses?
We want to unpack the problem and see if we can get you feeling more confident about your next financial year-end.
Do you need to be constantly ready for your financial year-end?
You do not need to prepare in advance for a financial year-end, just like you do not need to revise for an exam, but both go a lot better if you do!
Waiting until the last minute leaves you vulnerable to mistakes and missing information.
While some data cannot be prepared until your year draws to a close, there are plenty of spot checks that can be conducted throughout the year to lessen the administrative burden.
Using a digital filing system, you can collate a centralised store of important information that can be updated as new data comes in.
You can also unofficially close your books each quarter to process all of the data amassed every three months rather than processing all of it with a looming deadline.
These help turn a banquet into a buffet as you manage bite-sized admin tasks rather than sweating through hours of work.
Close monitoring of your financial responsibilities can also help you keep pace with changing legislation.
While the tax year brings with it changes, there can be smaller shifts throughout the year.
Being more hands-on with your money can allow you to adapt to investment opportunities or react to potential funding shortfalls.
Are there tax benefits to preparing a financial year-end early?
While there are no specific tax benefits to the financial year-end itself, early preparation will allow for a more tax-efficient approach to your budgeting and finance throughout the year.
This is due to you minimising the chance of missing deadlines or being too late in recognising the eligibility of an asset for relief.
For instance, being aware of things like Annual Investment Allowance (AIA) early can help you to incorporate eligible purchases into your financial planning for the year.
Even if you are getting closer to your financial year-end, there is no need to sit back and let the deadline draw nearer.
It is possible to compile draft accounts and circulate them to your trusted accountant around a month or so before the statutory deadline.
This can help you identify any last-minute tax planning opportunities that would otherwise have been missed while also avoiding any errors that would cause a delay in the filing.
Imagine completing your financial year-end without having to stress about whether everything is accurate and gathered up.
Even after you file your financial year-end, the work is not done.
You can use the lessons learned from the previous year to guide the process going forward into the future.
If there was anything frustrating, challenging, or inefficient, then pay particular attention to them and see whether preparing earlier would mitigate those issues.
Our team can help you polish your processes to be better prepared for all your financial filings, whenever in the year they occur.
Don’t dread financial year-ends. Speak to our team today!