7 Important Year End compliances for all Businesses

The new Financial year is just around the corner while we are at the end of the Financial year 2022-2023. It is a crucial time for business owner, there are year end close activities that needs to be done. But worry not, we have summarized some of the important activities that needs to be checked at this time. Without further ado, let's get started-

GST compliance :

The company needs to ensure that all the inputs have been taken correctly and should reconcile the input with GSTR-2B form. If there are any discrepancies, it should inform the supplier so that necessary steps could be taken while filing the return. 

The company should also check that the payment is made in respect of all purchases/expenses in which it has recorded GST input. As per the provisions of CGST Act, input has to be reversed if payment is not made for more than 180 days. The company has to pay tax liability along with interest on the same. So, to avoid the tax and interest, it should clear all the dues. Also, please ensure all the GST taxes have been paid accurately by using the correct rate.

Reconciling accounts 

The company should ensure that the bank account balance recorded in their books is the same as the bank statement. It should prepare a reconciliation in case of any discrepancies. The loan account statements should also be checked.

Fixed Asset verification & Depreciation:

Companies should verify the condition of their fixed assets. Any discrepancies should be properly recorded.

Charging depreciation is an annual exercise. The company needs to charge depreciation as per the accounting standards.

Self assessment tax :

The income tax should be calculated on the actual income based on the current tax rate. The self assessed tax should be paid to avoid interest at the time of filing of return. 

Debtors/Creditors Reconciliation :

It is the time when one should reconcile their accounts with debtors and Creditors. The best way to do so is to obtain confirmation from them through statement of account. It will ensure that both the Creditors and debtors are at the same page and will avoid any discrepancies at the time of settlement of dues.

TDS Deduction :

The Companies need to ensure that TDS has been deducted properly. There are expenses which attract TDS if they cross certain amount, for eg audit expenses, salaries, payments to contractors etc. It is last chance to check such expenses and deduct the necessary TDS to avoid penalty.

Inventory Management :

In the year end, one should review their inventory to ensure their books of account and the actual inventory are in alignment. Any missing inventory can be identified in the process. Inventory is an important aspect which will help in calculation of the cost of sales accurately. 

Review of Financial Statement  :

Financial Statement includes Balance Sheet, profit & loss and cash flow statement. During the year end, financial statements should be reviewed to check they are accurately reporting the company's financial position.

Content Writer 

CA. SUDRANIA MEGHA

TAX DESTINATION