Checklist for Financial year-end for businesses

The closing of the financial year and the opening of the new financial year are significant timelines for the growth of an organization. The financial year ending is a great opportunity to look within and to analyze and assess the performance of the business, a time to take stock and make your plans for the new financial year to come.

These activities, taking stock, analyzing, and planning can be overwhelming tasks at times, but they are the key to running a successful business venture. This is also the time to re-assess your goals and to take corrective measures to enable the achievement of these goals in the forthcoming financial year. The best way to achieve this is by closely scrutinizing your finances and reassessing your financial practices. This is the time to prepare your checklist for the new financial year. This will help you to streamline your workflow and give you the head start to make the new financial year a successful one.

Financial year-end Checklist for businesses!

• Estimate the Advance Tax payable for the year
• Prepare Key financial statements/documents
• Conduct statutory Audit
• Renew all the licenses and registrations
• Reassess your goals and prepare for the future
• Review your business and marketing plans
• Consider financing options for expansion
• Conduct a physical inventory
• Assess employee performance
• Self-evaluate

1.  Income tax – Advance tax payable estimate for the year

The Income tax department has provided companies the facility to pay tax in advance and this is in line with the views of the department which says "Pay as you Earn". In the course of the financial year starting from April 1st to 31st March, advance tax is payable on or before the 15th of June, 15th of September, 15th of December, and 15th of March.

Interest will be charged when the Advance tax payment for a particular quarter is not paid and the interest calculation will start from the 1st day of the succeeding month.

Hence, businesses should accurately calculate the estimated taxable income and pay advance tax within the due date. This is very important especially when the financial year is about to end, ie., March 31st. In addition to this, businesses have to receive the challan serial number along with the dates of deposit of such advance tax that is paid.

2.  Prepare key Financial statements/documents

Apart from paying the Advance Tax, the key financial statements must be accurately prepared to ascertain the financial position of the company. The key financial statements are the Balance Sheet, the Profit and Loss A/c, and the Cash Flow statement. These financial statements provide the details of the Assets and Liabilities of the company, the Profit or Loss, and the Cash flow position of the company.

Overall they allow you to calculate the current ratios, debts, and profit ratios for that particular year.

3.  Conduct Statutory Audit

A statutory Audit is a must for any business that is registered as a Private Limited Company. All the Books of the Company have to be audited before the financial year-end. However, for businesses that are registered as a partnership firm or LLP having a turnover that is below 40 lakhs then, a Statutory audit is not required.

4.  Renewal of Licenses and Registrations

Every business owner is required to keep track of all the licenses or Registrations that they have taken for the conduct of their business. Normally, these licenses/registrations are to be renewed every year, especially before the end of the financial year. This activity has to be taken care of by the end of the financial year.

5.  Reassess your Goals and prepare for the future

The goals that you have set for the business have to be first analyzed. List out the goals and try to assess whether you have met those goals. If not, analyze and find out the reasons that you could not achieve your goals. Identify the areas that you have failed. Reassess the goals in light of your strengths and weaknesses. A SWOT (Strengths, Weaknesses, Opposition, and Threat) assessment will greatly assist you in providing better insights and allow you to make critical changes in your business goals and activities.  These insights will help you to plan for the year to come.

6.  Reassess your Business and Marketing plan

The end of the financial year is the ideal time to reassess your Business and marketing plans. This will enable you to review your short and long terms goals and make changes accordingly. It will enable you to review your sales and marketing budgets and get proper insights into better business strategies. This activity will also enable the business to review the market potential and the competition and would also throw light on new business opportunities.

7.  Consider additional finance option

If business expansion is one of the changes you envisage or if you need higher cash flow for the new financial year, then it would be worthwhile to consider additional finance options. The additional finance could be for development projects or adding to the company's assets like purchasing a vehicle, machinery, or other types of equipment.

You can consult with your Bank for business loans, an overdraft, or a business credit card. The choice would depend on your circumstances. If there is an option to avail of a government grant you can proceed with that option. Crowdfunding is also an option that you can explore as it is nowadays commonly used to promote business, especially for start-ups.

8.  Conduct a Physical Inventory

Conducting a physical inventory of your complete stocks, work in progress, finished goods, stores and spares, tools and consumables, etc. as of 31st March is an important end-of-the-year exercise. This will give you a fair idea about the inventory growth or otherwise and help you to plan for the new financial year. The inventory of the items that you do not sell like office equipment will give a clear picture of the items that need repair or needs to be replaced. This will help you to budget for the next year.

9.  Assess Employee Performance

Employees are a vital cog in any business organization. Keeping the morale of the employees high is important and maintaining their loyalty is vital for growth. For this, you need to review your compensation and benefits structure and make sure they are in line with the industry and your business values. The compensation and the benefits that you offer have to be competitive enough if you are to hold on to your efficient employees and improve employee retention.

Companies that maintain such promotional paths reap significant gains in the loyalty and longevity of their employees. If you are looking to foster job satisfaction and loyalty among the employees you have to not only provide incentives but also be ready with a strong growth path that would empower the employees and boost their morale. This apart, planning a vacation with the employees, especially during the lean periods is another way to maintain job satisfaction among the employees.

10.  Self-evaluation and improving leadership

The earlier nine points in the checklist dealt with the performance of the company and its employees.

This checklist is incomplete if it does not have a point about evaluating the leadership and the leadership team. Every company should take time to reflect on its own leadership and the leadership team.

Objectively evaluate the performance during the year that is going to end. Find out the areas where there were shortcomings. Identify the areas that you think need improvement. This could be in the areas of time management, communication with employees, work culture, employee performance review, your understanding of business financials, business acumen, and your knowledge of the industry.

With this information, you will be able to implement a self-improvement plan for the new financial year. This will enable you to schedule time for yourself to not only learn and improve your business leadership skills but also encourage your leadership team to improve performance for their growth and the company's growth.

Conclusion

Preparing a checklist for the new financial year is a must for any business. This will help you to objectively reassess the performance of the company and provide insights to make necessary changes wherever required to promote greater growth. This activity will help you to prepare better for the forthcoming financial year and guide you to improve your all-around performance.

This is also the time for certain companies, especially those that have challenges in preparing accurate payroll and handling all Statutory compliance issues, to introspect and decide whether they need to get expert assistance in handling their Payroll and HR management. GetifyHR has been a leader in outsourcing Payroll and HR management and has the expertise and technology to handle this critical task with a great degree of accuracy and sophistication. Well, we will be able to handle the financial year-end pressures and ensure a smooth transition to the new financial year with the least bit of stress. Stay 100% compliant with GetifyHR!