Our Financial year is about to end and here are few points which should be considered before closing the financial year. These points should not be missed and every startup or business owner should understand its importance.
Ensure that you have properly counted your closing stock and the figures are genuine. Closing stock has great impact on profit. A little more or less can affect your income statement in Lakh. So proper count of closing stock with quantities and value is very important.
Ensure that all the expenses that were required to be booked in the expense statement have been considered. For example: booking of salary, electricity expenses, commission expense, petty cash expense, all purchases and sales.
Reconciliation with GST:
It should now be followed as a practice to reconcile the purchases with the data getting reflected online with the GSTR 2A. Any party not passing you credit must be informed. This should be done monthly to avoid the last-minute hassles. If till date it was not followed monthly, ensure that it is done before march closure to avoid the difference. Any difference If noted can be corrected while filing the GST Return in April.
Ensure that the cash reflected in the balance sheet and the actual cash in hand tallies. If the balance sheet shows figures in lakhs but you have amount in thousands, it can create problem. So ensure that the reconciliation is done and correct figure is reflected.
Check the bank and ensure that the bank reconciliation is done and it tallies with your bank statement.
Ensure that you have paid 90% tax in advance before 31st march to avoid the interest payment during your income tax return. Check all your compliance like TDS, GST. Discuss it with your CA to avoid any interest or penalty.
Always make it a point to check the outstanding loans getting reflected in your books. Please take ledger confirmation from the parties standing in your books to ensure that the inter party balance match. Difference in loan entries can lead to may problems in future and also wrong reporting filing the income tax return.
Ledger confirmation of receivable and payable:
It is good to have ledger confirmation of those parties with whom you are doing business very frequently so that any mismatch can be traced and the balances can be reconciled.
Ask for Form 26AS from your CA to check the list of those parties who have deducted the TDS to ensure that they are proper. Always have a meeting once before march month with your CA to understand your taxes well.