End of Year Accounts Checklist: What Every Business Owner Should Prepare
Year-end can feel overwhelming for business owners. Between managing day-to-day operations and keeping on top of paperwork, preparing for your accounts often gets left until the last minute. But proper preparation saves time, reduces stress, and ensures you don’t pay more tax than necessary.
This guide provides a step-by-step checklist of what every UK business owner should prepare for their end-of-year accounts.
1. Reconcile Your Bank Accounts
Make sure your bank statements match your accounting records.
Review all transactions for the year.
Flag anything missing or duplicated.
Reconcile credit card and loan accounts too.
This step ensures your year-end accounts reflect the true position of your business.
2. Review and Organise Invoices
Sales Invoices
Ensure all invoices have been issued for work completed.
Chase any outstanding payments before year-end.
Purchase Invoices
Collect and file all supplier invoices.
Check you haven’t missed any expenses you can claim.
Keeping sales and purchase records complete makes your profit figure accurate and avoids missed deductions.
3. Capture All Business Expenses
Every allowable expense reduces your tax bill. Commonly overlooked items include:
Home office costs (if you work from home).
Mileage and travel expenses.
Professional subscriptions.
Training costs related to your trade.
Tip: Review bank statements month by month to spot missing claims.
4. Check Payroll and Pensions
If you employ staff (or pay yourself a salary through your company):
Reconcile PAYE records with HMRC submissions.
Ensure pensions are correctly calculated under auto-enrolment rules.
Prepare P60s and ensure all year-end payroll obligations are complete.
5. Count and Value Stock (if applicable)
For product-based businesses:
Carry out a physical stocktake at year-end.
Value stock at the lower of cost or net realisable value.
Write down obsolete or unsellable items.
Accurate stock valuation is essential for a correct profit figure.
6. Review Fixed Assets
Check your list of assets, such as equipment, vehicles, and machinery.
Add new purchases.
Remove items no longer in use.
Consider claiming capital allowances to reduce taxable profit.
7. Accruals and Prepayments
Not all income and expenses neatly fall into one financial year. Adjust for:
Accruals: Expenses relating to the year but not yet invoiced.
Prepayments: Expenses paid in advance (e.g., insurance).
This ensures your accounts match the correct accounting period.
8. VAT Records (if registered)
Make sure all VAT returns have been filed.
Reconcile VAT control accounts.
Double-check invoices include VAT where applicable.
9. Corporation Tax or Income Tax Planning
Year-end is a good time to review tax planning opportunities:
Pension contributions for directors.
Timing of dividends or bonuses.
Utilising allowances like Annual Investment Allowance or R&D credits.
10. Prepare Management Reports
Beyond compliance, year-end is a chance to step back and review performance. Useful management reporting includes:
Profit and loss statement.
Balance sheet.
Cash flow summary.
Key performance indicators (KPIs).
These reports highlight trends and guide decisions for the new financial year.
Practical Example
A small marketing agency approached year-end without proper preparation. Their accountant helped them:
Identify £4,000 in missed expenses.
Adjust for prepayments on a 12-month software subscription.
Write down unsellable stock from promotional materials.
The result? Their taxable profit reduced, saving them over £1,500 in Corporation Tax.
Preparing year-end accounts isn’t just about compliance — it’s an opportunity to review, tidy up, and make tax savings.
To recap, your year-end checklist should cover:
Sales and purchase invoices
Expenses review
Payroll and pensions
Stocktake (if applicable)
Fixed assets
Accruals and prepayments
VAT reconciliation
Tax planning
Management reports
By staying organised and proactive, you reduce stress, avoid mistakes, and enter the new financial year with confidence. Partnering with an accountant ensures nothing is missed and maximises your tax efficiency.
