Summary: Year-end financial activities are essential for ensuring accurate reporting and compliance. Key tasks include reconciling accounts, processing employee compensation, and making accruals and adjustments to reflect actual financial performance. Tax provisions, inventory valuation, and GST reconciliations are critical to meeting regulatory obligations. Confirming debtors and creditors’ balances, checking EBITDA/net profit, and preparing financial statements ensure readiness for audits. Businesses should review internal controls, close books systematically, and report results to stakeholders. Preparations for FY 2025-26 involve financial planning, setting KPIs, reviewing investments, and addressing compliance requirements like e-invoicing and LUT renewals. These processes support strategic decisions and ensure a smooth transition to the next fiscal year.
List of activities a finance person has to perform at year to give financials a true , compliant and good look
Review of FY 2024-25
1. Reconciliation of Accounts:
a. Reconciling all general ledger accounts, bank accounts, and sub-ledgers to ensure there are no discrepancies.
b. Addressing any discrepancies and investigating the cause of the differences.
2. Employee Compensation and Benefits:
a. Processing year-end bonuses, incentive payouts, and reviewing any changes in benefits or pension plans.
b. Preparing and issuing year-end tax forms for employees (e.g.form 16).
3. Accruals and Adjustments:
a. Posting necessary journal entries for accrued expenses, revenue recognition, and other adjustments to reflect the actual financial performance.
b. Review and adjust estimates for inventory, depreciation, and amortizati
4. Tax Provisions:
a. Calculating provisions for income taxes, deferred taxes, and ensuring all tax-related obligations are recorded.
b. Ensuring that all necessary tax forms and documents are prepared for submission.
5. Inventory Valuation:
a. Ensuring that the inventory valuation is accurate, taking into account stock counts, write-offs, and obsolescence.
6. Input Tax Credit (ITC) & Reverse Charge Mechanism (RCM) (GST):
a. Match ITC claims with GSTR-2B and your books.
b. Cross checking Outward supplies align with GSTR3b,GSTR1 & Eway bill
c. Check ITC reversals as per Rule 42 & 43
d. Review RCM applicability on expenses (spl- Rental, legal) and imports.
7. Debtors/Creditors confirmations :
a. Review and adjust estimates for bad debts
b. Send relevant emails required for debtors & Creditors- Especially with the rule of Msme for payment within 45 days
8. Ebita/Net Profit check upto date – In order to pay advance tax by 15th March ( due date for advance tax ) & not
have last moment shocks
Preparation for Audit :
1. Financial Statement Preparation:
a. Preparing the balance sheet, income statement, cash flow statement, and statement of changes in equity for the year.
b. Ensuring compliance with accounting standards (e.g., GAAP or IFRS).
2. Reviewing Internal Controls:
a. Assessing the effectiveness of internal controls in the financial reporting process and updating them as needed.
b. Ensuring any control gaps or weaknesses are addressed before the year closes.
3. Budgeting and Forecasting:
a. Reviewing actual financial performance against the budget and preparing variance analysis reports.
b. Preparing financial forecasts for the upcoming year.
4. Closing the Books:
a. Finalizing the closing of books for the year, ensuring all entries are complete and correct.
b. Locking the books to prevent further changes after year-end.
5. Reporting to Stakeholders:
a. Preparing year-end financial reports for stakeholders such as investors, shareholders, and senior management.
b. Communicating key financial insights and results to these groups.
6. Year-End Audit:
a. Collaborating with external auditors to facilitate year-end audits.
b. Providing auditors with required documentation and support for their examination
7. Compliance and Regulatory Filings:
- Ensuring all necessary regulatory filings are completed, including tax returns, employee benefit filings, and
other statutory reports.
Preparation for FY 2025-26
1. Financial Planning for the Next Year:
a. Reviewing the company’s financial strategy for the upcoming year.
b. Setting new financial goals, KPIs, and strategies for growth.
2. Reviewing Investment Portfolio:
a. Evaluating the company’s investments to ensure they align with the overall financial goals.
b. Making necessary adjustments in the portfolio based on market conditions or performance.
3. Others:
a. Check if your business qualifies for E-invoicing (Turnover > ₹5 Cr).
b. Check and renew LUT is for any zero-rated supplies.
c. Setting up a new document series for invoices and GST records.
These functions ensure that the finance team provides accurate financial reporting, supports strategic decision-making, and prepares the company for the new fiscal year.
******
Author: CA Anoop Kumar Shah| Arp & Associates
