As the Financial Year 2023-24 is about to end, it calls for certain checkpoints that each business shall ensure before they close their books. We have listed below points to ensure accountants and management are on top of the year end checklist and the same have been listed below for your perusal.
In this blog, Finsmart Accounting – the leading accounting outsourcing services provider of India – will share top checkpoints before the financial year end. Let’s start!
Financial Year-end Closing Checklist
Deduct TDS on year end provisions: This has been observed that the company generally fails to deduct TDS on year-end provisions of expenses like Audit Fees, Annual Filing Charges, etc. Company needs to make sure that proper TDS has been deducted & paid in these cases.
Verification of Closing Stocks as on 31.03.2024: In tax audit cases, also for closing of books, we need to have quantity-wise & item-wise value of closing stocks as of 31.03.2024. Hence, the company needs to document this detail as of 31.03.2024.
Collecting Loan & FD statements: Accountants are advised to collect all running loans & Fixed Deposits and record actual/accrued interests properly.
Collecting Bank Statements: Keep/download bank statements and maintain BRS as applicable.
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Taking balance confirmations of all running parties: Accountants are advised to collect balance confirmations and ledgers of all sundry creditors & sundry debtors and reconcile the balances. This needs to be reconciled with 26AS as well.
Double check the expenses where TDS hasn’t been deducted: In all cases where TDS hasn’t been deducted on expenses, please reconfirm the TDS applicability with your consultant & take corrective action, if needed. Also, check the applicability of the Equalisation Levy.
TDS on Advance Payments: Check whether TDS has been paid on Advance Payments made to suppliers, especially where balances appear in the books as of 31.03.2024.
Reconcile Inter-branch balances: Company should reconcile inter-branch balances and balances of subsidiary companies otherwise closing the company’s books at year-end would be challenging.
Record Foreign Exchange Fluctuations Properly: In case of Foreign Parties or Assets/Investments where balance is outstanding/pending ascertain Foreign Currency Value as of 31.03.2024., apply AS-11 and record fluctuation difference properly. Take the help of a consultant if required.
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Recording Depreciation on Fixed Assets: Accountants are advised to make sure that proper depreciation as per Schedule II of Companies Act, 2013 has been recorded on Fixed Assets appearing in companies’ books.
Loan to Directors or Interested Parties: Loan to directors or any other person in whom the director is interested is prohibited by the Companies Act, 2013 subject to certain exceptions. Accountant needs to make sure the company is not providing or would not provide any such loan or guarantee.
Actuarial Valuation for Gratuity Payable and Leave Encashment Payable – If the auditor suggests, company should get an Actuarial Valuation done for Gratuity and Leave Encashment liability as per Accounting Standards prevailing in India
Transfer Pricing: Please ensure that your books are aligned with the agreement executed between the Holding company or Subsidiary Company or Associated Enterprises.
Taking proofs from employees against their investment mentioned in their declaration and deduct balance TDS: Accountants have the tendency to deduct TDS as per the declaration filed by employees at the beginning of the financial year. But in many cases, it has been found that employees fail to invest as mentioned in their declarations, hence it is advisable to collect all proofs as mentioned in the declaration and re-compute tax liability & deduct balance TDS while making payment of salary for March month.
GST related Checklist Points
Download all GSTR-2A/2Bs: Accountants are advised to download all GSTR-2A and GSTR-2B related to F Y 2023-24 and record GST Inputs if it hasn’t been recorded except ineligible ITC. If any input recorded in books does not appear in GSTR-2A, accountants are advised to highlight these cases with the concerned parties and ask those parties to take corrective action. If any transaction appears in the GSTR-2A and is not recorded in the books, please check whether that expense belongs to the company or not and record the same, if needed.
Reverse GST Inputs if payment pending or not made: In cases where the company has recorded GST Inputs and it has been more than 180 days and payment has not been made so far, company needs to reverse these Inputs and pay the corresponding tax liability along with interest.
Double check the income where GST not paid or paid at lower rate: In all cases, where GST has not been paid or paid at a lower rate, please reconfirm the same with your consultant. In case of exempt export supplies, please ensure that proper LUT is in place.
Match GST ledger balances: Reconcile GST ledger balances as on 31.03.2024 (Electronic Cash Ledger, Electronic Credit Ledger & Electronic Liability Ledger) with the balances showing in the books.
We hope that the above blog helped you learn about the checkpoints before the financial year ends. Got any queries to ask? Send them to sales@finsmartaccounting.com and have them answered by our experts.
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CEO
Mrs. Dipali Phadke is the back bone of the company’s operations. A qualified Chartered Accountant with more than 12 years of experience in the field of Accounting, Taxation and Audit.
