Discover crucial actions and precautions to take before closing your books of accounts on 31st March 2023. Ensure compliance, financial health, and strategic planning for the years ahead. Insights provided by Nitin Gupta, a financial expert.
Finalization of books of accounts means to ensure that your books of accounts are truly & fairly updated and finalized. There is no possibility of changes in accounts. But before doing this, you have to be ensured that your books of accounts are truly prepared, in such a way that all compliances have been compiled and you are dominating income tax & GST authorities.
Your today finalization of books of accounts will impact in the next 7 years for maintaining of accounts that how it is maintained for assessment purposes as well as todays planning will impact the next 5 years for the purpose of taking sponsorship from government for your business as well as taking financial assistance from banks/ venture capitalist/ investors or NBFC.
If your books of accounts are prepared truly & efficiently in good manner then you can also raise funds from the investors as well as you will also obtained true picture of your business either your business is earning or only you are investing in the business and you are feeling that you are only investing in the business but there is no margin.
Through proper accounts, you can take strategic decision as well as you can also compete with your business competitor.
Now what are the precautions to be taken, let’s discuss:
1. Whether all the purchases which are for the business purpose are reflected in the accounts and its reconciliation has done.
2. Whether sales invoices have been received in respective of advance payment received.
3. Whether your bank accounts has been reconciled.
4. Whether you have compiled the new provision introduce in the current financial year.
5. Whether you have compiled the new provision introduced in GST in the current year.
Provisions & Compliances which are brought from previous years, your team & your consultant also take care of it. But for the new provisions, your team and consultant has to be extra take care for this because there are chances of non-compliances. In the assessment, new provisions introduced are checked in the initial stage reason of higher chances of Non-compliances.
6. Whether all the payments vide credit cards/debit cards for the personal purpose are reflected properly.
7. Now you also have to check that whether you are collecting amount from debtors properly on due dates & even you are also facing that whatever you have earned, out of this some portion of profit is spent in the form interest reason of non-collection on timely.
8. If there is bad debts then make a plan and take action that how the amount can be recovered.
9. Any foreign payments made excluding the payments against import of goods may attract the IGST under RCM.
10. Creditors for more than 6 months, companies are required to made payment of invoice value to the respective suppliers within the 180 days. If it is not made then the input tax credit avail is required to being reversed.
11. Whether all the provisions of companies Act, 2013 are compiled.
12. Whether TDS is deducted on the salary payments and the other expenditure wherever TDS applicable.
13. Whether AIS/TIS/26AS has reconciled in respect of income, expenditures, purchase, sales reconciliation with the GSTR1 & GSTR3B, investment with the books of accounts.
14. Whether there is any demand or refund received during the year adjustment has been done.
15. Confirmation from the debtors & creditors has been obtained by the entity.
16. Prepare a plan for physical verification of fixed assets and inventories has on 31st march 2023.
17. Reconcile salary structure with return submitted with various departments.
18. Rectify the internal audit observations if any.
19. Whether are you eligible to take sponsorship from government for your business, have you taken the same.
20. Whether you have planned that your collection from debtor is to be reduced your collection period. All your receivables are making payment within time.
21. Whether the new labour laws have been compiled in your company.
22. Whether your organisation is ready to make sure that system of your organisation is dominating income tax and GST authorities.
23. Prepare report which contains sources of funds from where the amount is received through either business or loans or shares and where and how much the amount is invested either in the form of Inventory, Debtors or acquisition of fixed assets.
24. Prepare the fund flow statement. Fund Flow Statement helps in the following questions:
-
- Where have the profits gone.
- Why is there an imbalance existing between liquidity position and profitability position of an enterprise.
- Why is the concern financially solid in spite of losses?
*****
The author can be however contacted for further clarification at +91 8560044800 or via mail at nitin.73gupta@gmail.com
Disclaimer :- This blog is for the purposes of information / knowledge & shall not be treated as solicitation in any manner or of for any other purposes whatsoever.
Author Bio
Great and informative article.