A Financial year end checklist for SMEs/ Small Business owners
Financial Year End- What should SMEs and Small Business Owners keep in mind for current and next Financial Year Business Planning?
A few days left for the fiscal year to end and it is a significant time for the SMEs and small business owners. Why? well, this is that time of the year when it becomes important for SMEs and small business owners to pay attention to year-end business planning as well as they need to plan for the next financial year well in advance. Hence, it is important to prepare a Financial Year End Checklist for SMEs and Small Business Owners as soon as the new financial Year end is about to ring the door bell.
In common practice, it is believed that the end of the financial year for businesses is all about taxes. However, that is not the case, especially for the small businesses and SMEs. So here is a complete Financial Year End Checklist of the activities that Small business owners and SMEs before 31st March of each financial year.
Table of Content
Financial year-end checklist for Small businesses and SMEs
- Calculate Payable Advance Tax
- Prepare your key financial documents
- Statutory Audit
- Calculate your turnover
- Renew important licenses
- Learn from the past and prepare for the future
Calculate Payable Advance Tax
As the Income Tax Department has rightly said “Pay as you earn”. It is important to pay your taxes well in advance. So during a financial year from 1st April to 31st March, advance Income Tax is payable on or before 15th June, 15th September, 15ht December, and 15th March. Also, if an Assessee does not pay at least 90% of the payable tax by way of advance tax on or before the last day of a particular financial month i.e. 31st March then the interest will start from 1st of April till the month of the payment of the tax.
Hence, it is advisable that an assessee calculates his estimated taxable income as accurately as possible, the tax liability and deducts the TDS to get the total advance tax payable and pat the same before the end of financial year i.e. before 31st March. Also, once the payment is done it is important to receive the challan serial number along with the date of the deposits of such advance tax paid.
Prepare your key financial documents
Alongside paying advance tax it is important to prepare some key financial documents to ascertain the exact situation of the finances of the company. These basic financial documents are imperative as they provide the details of the profits or losses and expenses off the business, the cash flow, etc. Also by preparing the financial documents, you will be able to get the details of the assets and liabilities. These documents are:
- Balance sheet- to know all the assets, liabilities, and equity.
- Income statement- to know revenue, expenses, and profit.
- Cash flow statement- that will show the opening and closing cash within a specified time.
From the above documents, you may calculate the current ratios, debt, and profit ratios of that particular year.
If your business is registered as a Private Limited Company, then it is required to get the books of accounts audited i.e. statutory audit is mandatory before the financial year ends. However, if your business is registered as a Partnership firm or LLP having a turnover of less than 40 Lakhs then a statutory audit is not required.
Calculate your turnover
Calculating turnover for any financial year is necessary to assess the position of your business. Also, it helps the businesses which are not yet registered under the GST registration limit of 40 lakhs because as soon as the turnover of a business goes above 40 lakhs, it requires to get registered under GST. The total turnover up to 31st March is required to be calculated to determine the important aspects of the applicability of GST Registration, Eligibility of opting Composition Scheme and Applicability of filing specific return etc.
Renew important licenses
The small business owners are required to keep a track of the licenses that they have taken for their business. If these licenses are required to be renewed every year then before the financial year ends, one needs to renew these licenses as well. For e.g. if your business is in importing or exporting of goods or services, you will be required to have an IEC License which needs to be renewed every year between April to June of the next financial year.
Learn from the past and prepare for the future
Before the Financial year ends, take all the lessons that the passing year has taught you as a business owner and make the list of goals that you wish to achieve in the coming financial year as a business. Set an aim where you wish to see your business in the coming financial year.
It’s always great to keep this checklist ready during the last days of the financial year-end activities. This will help small businesses to assess the past year and get a better plan for the coming year. Wishing the greater success for the coming fiscal year.
Accounting and Compliance Services
Are you a Startup Company / LLP / OPC / Small Company? Are you scattered between expansion tasks and compliance? Now you should not worry, you can focus on the expansion of your business while we will take care of Accounting and Compliance tasks of your company.
About Ebizfiling -
Charges are very affordable and One of the fastest & bestest service I ever get and miss Snehal is too corporative and very dedicated I had recommended to all my colleagues even they also like thier services.
Great going Ebizfiling! We are satisfied with your services and would recommend them to others. Good luck for your future.
Great work done by the Ebizfiling team. Good luck for the future.