Statutory Year-End Closing
Accounting, specially year end operation is crucial for every business as the company is responsible to wards government and stakeholders. The procedure of accounting that is performed at the end of every year is an important aspect for every business. Typically, companies carry forward their balances of the past year and open accounts for the following year. For every business, this activity is crucial and complicated as a minor error can cost a huge amount to the company. Mistakes in year-end balance sheets can alter the financial statements of the company and attract penalty.
The following are a few reasons for the significance of year-end operation.
Documentation of financial activities
The procedures that companies perform at the year-end accounting facilitates in the documentation of multiple financial activities taking place within a fiscal year. Besides this, it helps in analyzing the strengths of weaknesses of every business entity.
Tracking income and expenditure
With year-end accounting activities, businesses can stay at par with their income and expenditure.
Business insights
The year-end accounting reports that experts prepare provides information that helps in reviewing the performance of the company.
Financial status
The accounting procedures also help in estimating the financial status of the company.
Tax liability
With the help of the documents financial activities the top-level executives of various companies can determine the tax liability of a business.
Reorganisation of bank statements
The year-end accounting reports track the bank statements and figure out the errors that exist in them.
Growth of business
The financial reports resonating with the year-end accounting procedures can surely track the real performance of the business and allow a company to make strategic plans for growth.
SPD Consulting Pvt Ltd is dedicates its services for businesses that require assistance for statutory year end closing. Every company is accountable to its stakeholders and shareholders. Moreover, businesses need to comply with laws and pay taxes, which is related to filing of government documentations and financial reports. To ensure that the reports are relevant, our experts can provide the assistance you need to carry out the year-end accounting work.
Year-End operation & Reconciliation Procedure
Customer reconciliation or accounts receivable reconciliation is one of the most crucial activities for every business as it helps in analysing all the statements related to receivables to rectify mistakes or irregularities. Year end operation is one of the activities that companies use to find flawed activity associated with accounts receivables.
- Customer reconciliation is a process in which experts compare the outstanding customer balances or bills associated with accounts receivable and tally with the records of the general ledger.
- Generally, the closing activity tales place at the end of every month before the issue of monthly financial statements.
- Customer reconciliation statement is significant for the manager accounts and internal auditor as it acts as a proof that the financial statements of the company contains no errors or inaccuracies.
- If any irregularity is noted during the reconciliation procedure, it is corrected before the preparation of monthly financial statements.
Significance of year-end reconciliation procedure
Customer reconciliation is crucial for every company as it affects the revenue. Besides this, the reconciliation statement is necessary to facilitate the process of auditing. Businesses follow this year end operation to track the accounts.
- Reconciliation rules out the chances of mistakes in the business receivable accounts.
- Prevents material errors in the financial statements of the firm.
- Assists the internal auditor during the account audits.
- Saves the revenue of the firm
SPD Consulting Pvt Ltd provides comprehensive year-end reconciliation services to businesses and assists them to make the financial statements free from any errors.
Maintaining Annual Financial Statements According To The IFRS Or The National Financial
Every company should present their financial position fairly and manage the cash flow or financial performance. The International Financial Reporting Standards present a set of rules to make the financial statements consistent and regular, and make it at par with the world. The International Accounting Standards Board issues the IFRS and their specifications state that companies must maintain their reports and subsequently accounts according to the standard mentioned there. It also defines various kinds of financial transactions and their impact. The intention of IFRS is to create a common set of rules to allow businesses and financial statements to stay consistent in each company and country.
SPD Consulting Pvt Ltd helps you to maintain the following financial statements according to the standards of IFRS.
- Statement of profit and loss or comprehensive income
- Balance sheet
- Statements related to changes in equity
- Statement containing cash flows
- Related party transactions
- Earnings per share and share based payments
- Asserts that are pledged as security
- Other financial liabilities
We have experts to check the consistency of financial statements of the company who can delve into the details to find out whether it resonates with the IFRS.
Reporting Standards for Small and Medium-Sized Enterprises
The motto of the financial statements for small and medium-sized entities is to provide relevant information about its financial standard, performance, cash flows which is valid for appropriate decision and applies to those users that may not be able to ask for reports that can meet their needs. The reporting standard for SME’s must incorporate the following features in the financial statements.
- Relevance
- Focus on substance over form
- Comprehensible
- Accomplished
- Comparable
- Timeframe
- Reliable and material inclusion
- Keeping a balance between cost and benefit
Take a glance at the reporting standards of IFRS for small and medium-sized entities include the following.
- Fair presentation of financial statements
- Assessing the impact of every financial decision
- Compliance with the standards of IFRS
- Frequency of reports
- Consistency in presentation
- Comparing the information
- Materiality and accomplishment
- Identification of financial statements
- Presenting additional information
- Presentation of information
- Current and non-current differences
- Disclosure of additional information
- Presentation of comprehensive income and other comprehensive income
- Analysing the expenses
- Statement of income and earnings retained
- Cash flow statements
- Notes to the financial statements
- Selection of accounting policies and its application
- stating the events taking place after the completion of reporting period
SPD Consulting Pvt Ltd assists the clients in the maintenance of annual financial statements, as part of year end operation, according to IFRS standards.
Up keeping of annual report of the activities of the company
The listed companies in India produce their annual reports which highlight their annual performances with that of shareholders. An annual report provides vital information to investors who want to understand the company, industry, the sector, views of the management, and also analyse the financial status. Investors can get annual reports from the website of the company and NSE or BSE, and receive them through post or email if they are shareholders. The following are a few necessary inclusions of annual reports.
Statements highlighting the vision and mission of the company
This section will bring to the limelight the vision and mission of the company, the goals and values.
Corporate details
In this section people can find the details of auditors, bankers and directors of corporate and registered office. You can also get details of designation of each board member here.
Overview of products and financial aspects of five to ten years
For details of products of the company and their performances based on the segment during the last two years along with the major raw materials consumed are present in this section. Companies highlight their financial performance in the report of last five to ten years. Investors look for information on tax, amortizations, depreciation, profit after tax etc. after assessing income, assets, equity, total debt, liability, earnings before interest and various other aspects.
Report of the director
In this section, people can find brief details of financials and explanation of financial results, along with the developments of the company.
Corporate governance report
This section provides valuable insights on corporate governance and relevant details and the key aspects you can find here are the composition of the board of directors, attendance records of directors and sub committees.
Management discussion and analysis
In this section, people can obviously study the trends and AWOT analysis and terms of financial statements and risk factors.
Information on company shares
For analysing the performance of company shares and its pattern of shareholding, investors need to follow this section.
Report of auditors
The comments of auditors on the financials of the company are one of the primary highlights of this section.
Financial statements
This part of the annual report brings to the limelight information on profit and loss accounts, cash flow statements, annual balance sheets for a couple of years.
SPD Consulting Pvt Ltd is one of those companies that maintains annual reports of companies and highlight their activities.
Up keeping of annual corporate income tax returns
The corporate tax return includes details of assets and liabilities prepared mainly during year end operation of accounting. Businesses also need to include items here such as debtors and creditors, fixed assets and loans. The following entities need file corporate income tax returns.
- For sole proprietors the income from business and other sources of personal income from house property must be present here.
- If the total income tax before deduction goes up the standard taxable limit then it is necessary to file the tax return irrespective of the extent of profit and loss.
- For firms, companies, and LLP’s, filing of business tax return is compulsory.
Due dates for filing returns
- For individuals not included in the periphery of tax audit, the date of filing tax return of August 31 after the completion of financial year.
- For those liable for tax audit and the other assesses of the company, partnership firm or LLP, the due date of filing tax return is September 30.
SPD Consulting Pvt Ltd assists companies in filing corporate tax returns.
Support during external audits of financial statements
An external audit is an independent financial examination of the financial statement that are prepared by the company. It is a statutory provision according to the legal system of India. The following includes key features of external audit.
- External audit helps in figuring out the accuracy and preciseness of the accounting records maintained by the company.
- It tries to find whether the annual accounts, prepared as part of year end operation, provide an impartial picture of the organisation and of course, whether they are prepared according to the legal norms.
- The process of external audit is compulsory should be concluded by a practising Chartered Accountant.
- The external auditors focus on various financial accounts and the risks associated with them and the entire finance area.
- The external auditors the company appoints must receive approval from the board of members.
- External audit procedure is carried out under the leadership of a practising Chartered Accountant which operates outside the company, which conducts the audit.
- The primary responsibility of the external auditors is to carry out the annual audit of the financial accounts of the company besides, providing their opinion on it.
- The opinion of the external auditors should reflect a fair and impartial approach in lieu of the financial status of the company.
The eternal auditors need to make the enquiries to the company management to determine the actual market of the organisation. The views and statements of the external auditor is provides the foundation for strengthening the managerial decision.
SPD Consulting Pvt Ltd provides the support needed for the external audit procedure of companies.