### Detailed Discussion Between CA Shivprasad Sakhare and Clients on Closing Books of Accounts

### Detailed Discussion Between CA Shivprasad Sakhare and Clients on Closing Books of Accounts

Client: Good morning, CA Shivprasad. We're nearing the end of the financial year and need your guidance on closing our books of accounts. What should we focus on?

CA Shivprasad: Good morning! Closing the books of accounts is very important. Let’s focus on three main areas: Accounting Principles, GST Compliances, and Income Tax Compliances.

Client: Sounds good. Let’s start with the Accounting Principles.

CA Shivprasad: Sure. Here are some key accounting principles you should keep in mind:

1. Accrual Principle: Record all revenues and expenses in the period they are earned or incurred, not when the cash is received or paid. This gives a true picture of your financial performance.

2. Consistency Principle: Use the same accounting methods and policies as in previous years unless there's a good reason to change. This helps in comparing financial statements year over year.

3. Materiality Principle: Focus on significant transactions that impact your financial statements. Small errors that don’t affect the overall accuracy can be ignored.

4. Conservatism Principle: Record expenses and liabilities as soon as they are known, but only record revenues when they are certain. This prevents overstatement of your financial position.

5. Reconciliation: Regularly reconcile all your accounts, including bank statements, debtors, and creditors, to ensure everything matches.

6. Provisions and Contingencies: Make provisions for doubtful debts, depreciation, and other liabilities. Note any contingent liabilities, which are potential liabilities that might occur depending on future events.

Client: That’s clear. What about GST compliances?

CA Shivprasad: GST compliances are very important. Here’s what you should do:

1. Reconcile GSTR-1 and GSTR-3B: Make sure the sales reported in GSTR-1 match with what you reported in GSTR-3B.

2. Input Tax Credit (ITC): Verify that all ITC claims are supported by valid invoices and that your suppliers have also filed their returns correctly.

3. Reverse Charge Mechanism: Identify any transactions that fall under reverse charge and ensure GST is paid on them.

4. Annual Return: Prepare and file your annual return (GSTR-9). This includes a summary of all the monthly or quarterly returns you filed during the year.

5. Reconciliation with Financials: Ensure that the turnover declared in GST returns matches with your audited financial statements.

Client: Got it. Now, what should we consider for Income Tax compliances?

CA Shivprasad: For income tax, keep these points in mind:

1. Tax Audit: If applicable, ensure your tax audit report is prepared and filed on time. This involves detailed scrutiny of your books to ensure compliance with tax laws.

2. Advance Tax: Check that all advance tax installments have been paid correctly to avoid interest and penalties.

3. TDS Compliance: Make sure all TDS (Tax Deducted at Source) returns are filed and TDS certificates are issued to vendors and employees.

4. Form 26AS: Reconcile Form 26AS with your books to ensure all TDS credits and advance tax payments are correctly recorded.

5. Deferred Tax Liability/Asset: Calculate and record any deferred tax liabilities or assets as per accounting standards.

6. Filing of Income Tax Return (ITR): Accurately prepare and file your income tax return, ensuring all incomes, deductions, and credits are correctly reported.

Client: This is very detailed and helpful, CA Shivprasad. Is there anything else we should keep in mind?

CA Shivprasad: Yes, a few more general tips:

1. Documentation: Keep proper documentation for all transactions to support the entries in your books.

2. Internal Controls: Review and strengthen internal controls to prevent and detect any discrepancies.

3. Audit Preparation: Be ready for statutory audits by keeping your books and supporting documents in order.

4. Compliance Calendar: Follow a compliance calendar to ensure all filings and payments are made on time to avoid penalties.

Client: Thank you so much for this thorough guidance. We feel more confident about closing our books correctly.

CA Shivprasad: You’re welcome. Remember, a systematic approach ensures accuracy and compliance, reducing the risk of errors and penalties. If you need any further assistance, feel free to reach out.

Client: Definitely. Thanks again!

CA Shivprasad: My pleasure. Have a great day!