Financial year-end checklist for SMEs
As the current financial year is coming to an end, it is going to be a hectic time-period for small and medium enterprises (SMEs), as they need to take charge of all their book closing records, budgeting and tax planning.
Below is a checklist that SMEs need to take care of before wrapping up their business records for the current financial year:
Review last year’s performance
It is essential for SMEs to check if they have been able to meet the goals that they had set at the onset of the previous financial year in terms of revenue, profit, sales, networking, wealth accumulation or any other specific target.
A review would help SMEs understand the areas where they can improve and take the required steps in the upcoming financial year.
Review financial report
Before the financial year ends, SMEs must evaluate their financial reports including balance sheet, profit and loss statement and income statement. Thebalance sheet gives an idea about one’s assets and liabilities and the overall performance of the business.
The profit & loss statement will give an idea about where the business performed well and where it lagged. The income statement, on the other hand, will provide an overview of revenue generation.
It is essential for SMEs to be aware and updated about all the tax norms. While it is important to know the announcements made in the Interim Budget, it’s equally essential to make sure that one complies with the current rules and regulations regarding taxation.
All the essential documents pertaining to taxation must be well-kept and professional assistance must be sought if required.
Review assets and do an inventory check
Before the current financial year ends and SMEs switch focus to next year’s business prospects, they must make sure to have an in-detail report about their assets along with their respective valuation as well as depreciation or appreciation rate.
It is important to get rid of any such assets which are not serving their purpose. At the same time, it is essential to do an inventory check (if applicable) and make an accurate and all-inclusive stocktake.
Update vendor and client information
Along with updated employee records and business stats, SMEs must keep an updated list of their vendors and clients as well. At the same time, it is essential to review one’s agreements with existing vendors to ensure that they are being at par with the existing market rate for their services. If required, new contracts can be made on the lines suiting the needs of both parties.
Adequate funding is an important element of year-end strategic business plans. It’s crucial to take into account the various operating expenses such as payroll, recruitment and employee benefits, sales and marketing to provide sufficient cash flow during the course of the next financial year. This will help SMEs maximize returns on investment.
After reviewing your expenses and potential returns, if you find that there is a need for extra funds, Reliance Money can be an ideal partner for your capital requirements. Our Business Expansion Loan can help you turn your ambitions into reality.