Business Year-End Checklist for South African Small Businesses
Year-end shouldn’t be the point where you suddenly discover what has been happening in your business for the last twelve months.
Ideally, your bookkeeping, accounting records and tax affairs have been kept up to date throughout the year. But we know that running a small business doesn’t always work that way.
Invoices pile up. Receipts disappear. Transactions need explanations. Payroll changes. Equipment gets purchased. And before you know it, your financial year-end has arrived.
Getting organized before your accountant starts preparing your year-end accounts can save time, reduce unnecessary back-and-forth and give you a much clearer picture of how your business actually performed.
Here are some of the areas worth reviewing.
1. Make sure your bookkeeping is up to date
Start with the basics.
Have all your sales and expenses been recorded? Are there transactions sitting in your bank account that haven’t been allocated? Are there purchases or payments that still need supporting documents?
The cleaner your bookkeeping is going into year-end, the easier it becomes to prepare meaningful financial information.
This is also a good opportunity to deal with those little issues that have been sitting in the books for months instead of carrying them into another financial period.
2. Reconcile your bank accounts
Your accounting records should agree with your actual bank accounts.
Bank reconciliations can help identify duplicate transactions, missing entries, incorrect allocations and transactions that still need to be investigated.
If you use more than one business account, credit card or payment platform, remember to review all of them.
3. Review who still owes you money
Take a good look at your debtors.
Which customers still have outstanding invoices? How old are those invoices? Are they genuinely expected to be paid?
Year-end is a good time to follow up on overdue accounts and review whether your invoicing and collection processes are working as well as they should.
A profitable business on paper can still struggle if customers don’t pay on time.
4. Review what the business still owes
The same applies to your suppliers and other outstanding liabilities.
Make sure supplier invoices have been captured correctly and review any amounts that remain unpaid.
Having a clear picture of what is owed by the business is important when assessing its financial position at year-end.
5. Gather invoices, receipts and supporting documents
Good accounting starts with good records.
Make sure you have supporting documentation for relevant business transactions and that these records are stored somewhere sensible and accessible.
If you’re still searching through WhatsApp messages, emails and drawers every time your accountant asks for an invoice, consider making better record keeping one of your goals for the new financial year.
6. Review your assets and major purchases
Did the business purchase computers, machinery, furniture, vehicles or other significant assets during the year?
Make sure your accountant knows about them and has the relevant documentation.
It is also useful to identify assets that have been sold, scrapped or are no longer being used.
7. Check payroll information
If you employ staff, review your payroll records and make sure employee information, remuneration and relevant payroll records are complete.
Don’t leave payroll discrepancies until somebody needs information months later.
8. Review your tax position
Your financial year-end is closely connected to your company’s income tax and provisional tax obligations.
For companies, SARS requires the company income tax return (ITR14) within 12 months after the company’s financial year-end. Provisional tax also works around the company’s year of assessment, with the second provisional payment generally due by the financial year-end.
This is one of the reasons tax planning shouldn’t only happen when a return becomes due.
Knowing approximately where your business stands before year-end gives you more opportunity to prepare for upcoming obligations and manage cash flow.
9. Look at the actual performance of the business
Year-end isn’t just a compliance exercise.
Ask:
Did revenue grow?
Which products or services made money?
Where did expenses increase?
How healthy is cash flow?
Are customers paying quickly enough?
Is the business carrying unnecessary costs?
Which areas deserve more investment next year?
Financial information becomes far more useful when you use it to make decisions rather than simply submitting returns.
10. Plan the next financial year
Once you’ve looked backwards, look forwards.
Set realistic revenue targets, consider expected expenses, review pricing and think about any large investments you expect to make.
If there were bookkeeping, cash-flow or administrative problems this year, decide how you’re going to prevent the same problems next year.
Year-end doesn’t have to be stressful
A well-organized year-end starts long before the final day of the financial year.
Keeping accurate records throughout the year gives you better information, makes compliance easier and helps you understand what’s really happening inside your business.
Need help getting your business year-end ready?
NHB Business can assist with bookkeeping, accounting, tax and ongoing business support.
