Come March, there is always a lot of work that the accounts departments are flooded with. The end of the financial year brings in panic, concern and anxiety to streamline accounts and get things ready for the IT filing that falls later in the year. However small or big the business is, the load of work around March and filing is almost the same. Here is a ready reckoner from Chennai Accounts – Accounting Services Company in Chennai, that will help you tick off things you have finished with so that when you get things ready for your IT filing the process is almost seamless. Whether you are a service provider or a trader, closing of accounts is a process that applies across businesses, of course traders dealing with goods would have a few more documents to annex.
Step 1- Inventory Statements
While inventory management is a process in itself, it is one of the most important records that helps analyse profit or loss of a business. A complete error free inventory is the first step to success in a business. When you account for inventory, check for stock available, goods sold and ensure that they tally. A perfect tally on an inventory statement is very important to calculate profit.
Step 2- Keep track of incoming cash and invoices
Businesses run on the payments they receive for the service provided or product sold, keeping track of the invoices raised and the payment received against them is yet another important task at hand. Check that you have received payments for all invoices raised, ensure no invoice goes unnoticed.
While doing this, it is also important to make a list of invoices that are past due. This will help you to get a sense of how much money you are yet to receive.
Step 3- Maintain Petty Cash records
Every business is bound to have small expenses in the form of petty cash expenses which may include postage, photocopies, payments as tips etc. Keeping track of these transactions is also important to identify an amount that will be set aside each month as petty cash. This can be maintained manually or using a software like TallyPrime etc.,.
Step 4- Reconcile Bank Accounts
At the end of the year, all your bank statements and the book balances should be equal. When you prepare the Bank Reconciliation Statement, you will be able to check if the amount recorded in the bank statement and the amount documented in the organisation’s accounting match. The statement helps check entries and identifies discrepancies if any. This is one of the most important steps before going to file the IT returns. Businesses that use accounting software can crosscheck this automatically, while businesses that have manual entries will require experts such as Chennai Accounts to prepare an error free Bank reconciliation statement.
Step 5 – Review all financial documentation
The ledger, balance sheet, profit/ loss statements need to be in agreement to show an accurate trial balance. This is important to show that your financial records are balanced with the debits and credits reflecting a net balance of zero. These documents can be manually maintained or can be generated using a software. Chennai Accounts, one of the leading accounting firms can help you maintain and organise all financial documentation.
TIPS- Practices that can help you organise better
- It will be a good practice to prepare monthly financial statements so that while you close books annually, you have a better picture of the business’ performance through the year. This will provide better analysis to identify lean and peak months of business.
- Have time dedicated each month to look at the books, so that you do not have to do it all at the end of the fiscal year.
- Invest in a pocket-friendly software that can help you reduce human error and automate your transactions. If you need any assistance regarding the leading accounting software TallyPrime, contact Sakthi Business Services – Authorised Tally Partner in Chennai.
- Take a back -up of all documentation, especially if you do not have a cloud storage facility. So that all information is available at any time.
- Take professional assistance to complete your Closing of Accounts and book keeping, this can reduce a great burden on your part. Chennai Accounts offers competitive and affordable Accounting services you can avail.
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