As the financial year-end approaches, businesses must focus on financial accuracy, regulatory compliance, and strategic planning. A well-structured year-end review not only prevents penalties but also enhances financial stability and prepares companies for a seamless transition into the next fiscal year.
1. Essential Compliance Checks for a Smooth Year-End
a. Inventory and Asset Valuation
- Conduct a physical stock verification to align recorded inventory with actual stock.
- Adjust discrepancies in valuation to ensure accurate tax and profitability calculations.
- Update depreciation schedules as per regulatory requirements.
b. Financial Reconciliations
- Verify outstanding expenses and reclassify prepaid costs to align with the current fiscal year.
- Obtain balance confirmations from suppliers, customers, and financial institutions.
- Review foreign exchange balances and revalue them for accurate gains/losses.
c. Compliance with MSME Payments
- Ensure payments to Micro and Small Enterprises (MSMEs) are settled within the legally mandated period (15/45 days) to avoid penalties.
d. TDS and Tax Provisions Review
- Deduct and deposit Tax Deducted at Source (TDS) for applicable expenses like audit fees and commissions.
- Cross-check TDS records with Form 26AS and AIS to prevent mismatches.
2. GST Reconciliations and Regulatory Obligations
GST Compliance Checklist
- Input Tax Credit (ITC): Match ITC claims with supplier filings and reverse ineligible credits.
- Outward GST Liability: Reconcile sales records with GSTR-1 and GSTR-3B.
- GST on Advances: Ensure proper tax treatment for service advances received.
- Reverse Charge Mechanism (RCM): Verify if RCM obligations were met for services like imports.
- LUT for Export: Renew the Letter of Undertaking for tax-free exports.
3. Preparing Financial Statements and Audit Readiness
- Finalize financial statements incorporating necessary adjustments like depreciation and provisions.
- Prepare for statutory audits in advance to avoid last-minute challenges.
- Collaborate with Chartered Accountants to ensure accuracy and regulatory compliance.
4. Strategic Year-End Financial Planning
a. Optimizing Tax Planning Before March 31st
- Finalize financial statements incorporating necessary adjustments like depreciation and provisions.
- Prepare for statutory audits in advance to avoid last-minute challenges.
- Collaborate with Chartered Accountants to ensure accuracy and regulatory compliance.
