Year-end closing for a limited company: timeline and checklist before the auditor arrives

Every year, once the accounting period ends, a limited company has a series of tasks to complete: closing the accounts, having them audited, holding a shareholders' meeting to approve the financial statements, and finally filing the financial statements and tax returns. If the work starts late or the information is not ready, everything piles up close to the deadlines and the risk of fines rises.

This article summarises the key timeline and a checklist that helps the annual close run smoothly.

Timeline after the end of the accounting period

Tax returns filed online usually get extra time beyond the normal deadline, as announced by the Revenue Department. Registered partnerships have some conditions that differ from those of limited companies, for example they hold no shareholders' meeting, so check the deadlines that apply to your type of business.

Checklist before the auditor arrives

• Reconciliations of every bank account at the period end, with confirmation letters from the banks
• Detailed listings of receivables and payables by customer and supplier that agree with the general ledger
• Results of the stock count at the period end, with the adjustments for any differences
• The fixed asset register with depreciation calculations, and the purchases and disposals during the year
• Accrued expenses, prepaid expenses and income received in advance, allocated to the correct period
• A summary of VAT and withholding tax for the whole year, compared with the returns actually filed
• Key contracts, such as loan agreements, leases and contracts with major customers
• Details of loans between the company and its directors or related companies
• Minutes of board and shareholders' meetings relating to transactions during the year

What usually delays the annual close

• Missing documents: expenses without a valid tax invoice or receipt
• Director accounts: money a director paid on the company's behalf, or took out of the company, without supporting documents
• Inventory: figures in the system that do not match the physical stock, with nobody looking into why
• Period-end items: revenue or expenses recorded in the wrong period

Plan ahead to close faster

1. Make the monthly close a habit, and far less work will be left for the year end.
2. Book the auditor in advance and agree the list of documents to prepare.
3. Set the dates for counting stock and assets before the year ends.
4. Review unusual items in the last quarter, before it is too late to fix them.

Frequently asked questions

Does a company with no revenue yet still have to file financial statements?

Yes. A limited company that is still registered must prepare financial statements, have them audited by a certified public accountant and file them on time, just like a company that has revenue.

What happens if the financial statements are filed late?

There may be fines under the relevant accounting and tax laws, and late filing also affects the company's credibility with banks, business partners and any authority that relies on financial statements when making its assessment.

What is the difference between a bookkeeper and an auditor?

The bookkeeper records the accounts and prepares the business's financial statements, while the certified public accountant is an outsider who audits the financial statements and expresses an opinion on them. The two roles must be kept separate to preserve independence.

Let us help you prepare for the annual close

Kerwin & Vance helps plan the annual close, prepares the supporting schedules for the financial statements and coordinates with the auditor so the work is finished on time. Find out more about our Accounting & Reporting services, or book a consultation with us.

This article provides general information only. Deadlines and conditions may change with announcements by the relevant authorities, so check the latest information before taking action.