Three top tips for an efficient financial year-end
The general UK government financial year-end is now well and truly close by – and for those firms that coincide their own year-end with the general one, the to-do lists of their finance leaders are likely to be extending.
This year, there are also some special events to worry about. Not only will you have to carry out your usual checks, but you’ll also have to factor in the impact of Making Tax Digital. With that in mind, here are three key top tips for ensuring that your financial year-end goes as smoothly as possible.
Understand your Making Tax Digital obligations
This year, it’s important to make sure that your financial year-end planning takes into account the arrival of Making Tax Digital. The start of the next general UK government financial year coincides with the arrival of this edict from Her Majesty’s Revenue and Customs (HMRC), which is forcing all VAT taxpayers to switch to a computerised, API-friendly return filing system.
There’s a “soft landing” period about to begin, which means that you’ll be able to carry on copying and pasting figures over to your return (rather than using HMRC’s required API functions) for a little while longer. However, while this offers some respite, it’s still vital to make that switchover as soon as possible. After all, having a more powerful data management system in place will help with other financial year-end tasks too. Centralising all of your data to an accessible dashboard will mean that colleagues in other teams won’t have to pester you to find out how much budget they have left, for example.
Meet your deadlines
Different companies can have different deadlines for each of the many financial and reporting obligations they have – but for most, the financial year is likely to hold some important calendar entries. For most firms, Corporation Tax is paid within a certain time period after the expiration of your “accounting period”. Usually, this is the same as your financial year – and for ease, your financial year may have been set to coincide with the general UK government one.
There are other deadlines too. Your company accounts deadline may well be the same as the Corporation Tax one. No matter when your year-end is, using a data-savvy financial software package to manage these deadlines will mean that you won’t miss it – and you’ll be able to save significant staff time and resources as much of the required accurate information will already be there.
Communication is key
Lots of stakeholders will need to be involved in a financial year-end. Departmental heads from outside of the finance team will need to be asked to make their strategic plans – and set relevant budgets – for the coming year. If that has not already happened, then it needs to happen as soon as possible in order to ensure that you can accurately project cash flows.
Planning ahead is key when it comes to managing your financial year-end. By communicating well, organising your deadlines and researching the impact of Making Tax Digital, you’ll be able to ensure that you navigate this period successfully.
Are you concerned about the financial year-end and what it might mean for your business?