As the financial year 2023-24 draws to a close, it’s crucial for businesses to prepare for the year-end closure of their books of accounts. To facilitate this process, a detailed checklist covering various accounting, tax, and compliance matters has been outlined below. While this checklist is comprehensive, it’s essential to customize it according to your specific business requirements.
Accounting related Matters
1. Verification of Closing Stocks as on 31.03.2024
You are required to take physical verification of stock, including quantity-wise & item-wise value of closing stocks as on 31.03.2024. Hence company need to document this detail as on 31.03.2024 and also prepare a physical stock verification report.
2. Physical verification of cash balance as on 31.03.2024
You are required to take physical verification of cash as on 31.03.2024 and match the same with your books of accounts.
3. Collecting Loan & FD statements
Accountant are advised to collect all running loans & Fixed Deposits and records actual/accrued interests properly.
4. Reconcile Inter-branch balances
Accountants should reconcile inter-branch balances and balances of subsidiary companies otherwise closing company’s books at year end would be challenging.
5. Taking reimbursement sheets from all employees
Accountants should take reimbursements sheet from all employees including directors related to F/Y 2022-23 and record all expenses related to F/Y 2022-23 in F/Y 2023-24 only. It has been found in many cases that accountants fail to take these sheets timely and records these expenses in next financial year.
6. Collecting Bank Statements
Keep/download bank statements and prepare year end BRS.
7. Recording Depreciation on Fixed Assets
Accountants are advised to make sure that proper depreciation as per Schedule II of Companies Act, 2013/Income Tax Act has been recorded on Fixed Assets appearing in companies’ books.
8. Loan to Directors or Interested Parties
Loan to directors or any other person in whom director is interested is prohibited by Companies Act, 2013 subject to certain exceptions. Accountant needs to make sure the company is not providing or would not provide any such loan or guarantee.
9. Bills / Expenses booking against advances paid
You are request to check ledger accounts having debit balances and see if any bill/expenses booking is pending. In such cases necessary bills are required to be collected and booking to be done in books of accounts.
10. Debtors balance ageing and confirmation
Ageing analysis of Debtors balances in books are to be done bases on 0-90 days, 90-180 days and 180 days and above. Balance confirmation to be obtained from debtors.
11. Trade Payables ageing and obtaining balance confirmation
Ageing analysis of trade payable is to be done and necessary balance confirmation to be obtained from all creditors.
12. Provision of Expenses
Accountants are advised to make necessary provisions in books of accounts, like salary payable, electricity payable, rent payable, etc.
13. Unsecured Loans
Book Interest on unsecured loan as per agreed rate and collect balance confirmation from unsecured loan.
14. Prepaid Expenses
Calculate component of prepaid out of expenses and pass adjustment entries in books.
15. GST adjustment Entries
GST adjustment/ offsetting entries to be passed based on GSTR 3 B filed on monthly basis.
16. Remuneration to directors/Partners
Book entries for remuneration paid/payable for the Director/Partner of the entity.
17. Income Tax Related Matters
1. Deduct/ Collection of TDS/TCS on year end provisions:
Please see if there are instances where you have failed fails to deduct TDS on expenses. If yes, arrange to deduct TDS and deduct TDS on expenses for the month of March. After deducting TDS make sure that TDS deducted is paid on or before 30.04.2024
2. Payment of Tax:
In case if adequate advance taxes are not paid, please make sure the payment of balance taxes in April 2022 to avoid further interest under section 234B of Income Tax Act, 1961
3. Double check the expenses where TDS hasn’t been deducted:
In all cases where TDS hasn’t been deducted on expenses, please reconfirm the TDS applicability with your consultant & take corrective action, if needed. Also check the applicability of Equalisation Levy.
4. TDS on Advance Payments:
Check whether TDS has been paid on Advance Payments made to suppliers, especially where balances appearing in the books as on 31.03.2024
5. Payment to MSME with 15/45 Days
You are required to make list of MSME registered (under the category of Micro and Small Enterprise) whose payments are outstanding as on March 31, 2024 and are due for more than 15/ 45 days. Make sure that payments are made as per Section 43b(h) of Income Tax Act to avoid any disallowance of expenses.
6. Reconcile transaction with 26 AS/AIS/TIS
All Transactions appearing in 26 AS/ TIS/ AIS are to be reconciled with books of accounts.
Goods & Service Tax Related Matters
1. Double check the income where GST not paid or paid at lower rate:
In all cases, where GST hasn’t been paid or paid at lower rate, please reconfirm the same with your consultant. In case of exempt export supplies, please ensure that proper LUT is in place.
2. E-invoicing mandatory
The Government has ruled mandatory E- invoicing for turnover above Rs.5 crores. Now, in case your company/entity have crossed the threshold limit you are mandatorily required to issue E invoices. Please check if there is any e-invoicing pending at your end.
3. Letter of Undertaking
The LUT, if applicable, should be applied for the Financial Year 2024-25 on or before 31st March 2024 so that the exports orders don’t face any issue at the last moment.
4. Download all GSTR-2A/2Bs:
Accountants are advised to download all GSTR-2A and GSTR-2B related to F/Y 2023-24 and record GST Inputs if it hasn’t been recorded except ineligible ITC. If any input recorded in books is not appearing in GSTR-2A, accountants are advised to highlight these cases with the concerned parties and ask those parties to take corrective action.
If any transaction is appearing in the GSTR-2A and not recorded in the books, please check whether that expense belongs to the company or not and record the same, if needed.
5. Reverse GST Inputs if payment pending or not made:
In cases where company has recorded GST Inputs and it has been more than 180 days and payment hasn’t been made so far, company needs to reverse these Inputs and pay the corresponding tax liability along with interest.
6. Match GST ledger balances:
Reconcile GST ledger balances as on 31.03.2024 (Electronic Cash Ledger, Electronic Credit Ledger & Electronic Liability Ledger) with the Balances showing in the books.
7. GST on Advances:
Check whether GST has been paid on advances appearing/received from customers as on 31.03.2024. This needs to be paid in case of services
8. Input Tax Credited
Make sure all GST inputs recorded in the books are appearing in GSTR-2A/2B of F.Y. 2023-24. In case it is not appearing, inform to respective parties timely and ask them to fix the same in their returns before the prescribed timeline (i.e. November, 24).
9. Important GST Reconciliation:
- Reconciliation of GSTR-3B with books
- Reconciliation of GSTR 1 with GSTR 3B
- Reconciliation of GSTR-1 & books
- Reconciliation of GSTR-2A/2B with books
Make sure these above reconciliations are well prepared and required adjustment in books & returns are done.
10. Verify compliance of section18(6) for transfers/sale of P&M. Consider valuation in case of related party transactions
11. Rule42–Impact of annualized ITC reversal in case of exempted as well as taxable supplies to be considered (re-computation)
12. RCM discharged vis a vis the entries appearing in GSTR 2A.
Other Matters
1. ESI or PF Registration:
If these registrations were not applicable earlier due to lower number of employees, please recheck their applicability and apply for registration under EPF/ESI if anytime during the year number of employees have exceeded the number 20 or 10 as the case may be.
2. PF & ESI Dues
Please ensure that PF & ESI dues due for the March 24 are paid on or before 20th Day of April.
3. Professional Tax
Please check if professional tax due on March 24 are paid on or before 28th Day of April
Conclusion: The year-end closure of books of accounts is a crucial task for businesses to ensure compliance with regulatory requirements and maintain accurate financial records. By following the comprehensive checklist provided above, businesses can streamline the year-end closure process and mitigate the risk of non-compliance. It’s essential to review and customize the checklist based on your business’s unique circumstances and seek professional advice if necessary. With proper planning and attention to detail, businesses can successfully conclude the financial year 2023-24 and prepare for the upcoming fiscal year.
Wish you a great start to the fiscal year 24-25 ahead!!
*****
For any issues, please feel free to reach out to me.
Author: CA. Kumar Victor Saha | Partner, MSKD & Associates | E-mail:ca.victorsaha©gmail.com
Author Bio
very ggod article
sir,
A Doctor maintained a private hospital and pharmacy stores (two business single proprietor).
Cash on hand balance as on dt:30-03-24 rs:30 lacs as per hospital account books and physical verficiation cash rs:38 lacs.
Cash on hand balance as on dt:30-03-24 rs:25 lacs as per pharmacy stores books and physical verficiation cash rs:23 lacs .
doubt:
Assessee cash on hand balance excess and shortage difference amount cash deposit in bank account compulsory as on dt:31-03-24