Seven points to consider when closing the accounts
Posted: Sun Dec 22, 2024 4:17 am
With November approaching its halfway point, the final stretch for the closing of the 2016 financial year begins, and companies are starting preparations to close their financial year , some with a profit and others will count the days until sales arrive to clear the profit and loss account , the result of which looks worse than expected.
There is a month and a half ahead in which the sales departments are busy closing deals, so that the photo finish shows them in the best possible light, while, on the other hand, stocks are monitored in preparation for the end of the year and the administration departments are beginning to feel the pressure of the workload that is approaching.
Seven points to consider when closing the 2016 financial year
For accounting departments , the accounting closing calendar begins with the last tax settlement of the year in January 2017. Once the VAT settlements , payments on account russian phone number whatsapp and annual summaries have been made, the margin of action on the result of the year is considerably reduced.
But before entering the final stretch of closing the accounting year , there are some points that we must take into account:
Companies with a turnover of more than 10 million euros will have paid 23% of their profit in advance, so when it is time to pay corporate tax, the settlement will no longer be so painful, as the effort has already been made in advance.
If the result is estimated to be good, expenses can be anticipated , such as pending repairs to facilities or vehicles, or why not, a detail can be given to the employees, in the form of a bonus , since they have contributed with their effort to the good result of the year. In relation to the investment in fixed assets, it must be taken into account that only the proportional part of the annual fee will be amortized ; that is, if we buy a fixed asset of €12,000 on December 1 and the useful life of the fixed asset is 10 years, only €100 will be deducted as an expense in the year, so this would not be the way to reduce the profit in this year, even if everything is paid in 2016.
The accounting can be reviewed, since from January the workload will be increased with the completion of the closing entries . The most common year-end closing adjustments are: reclassification of debts from long-term to short-term, entry of variation in stocks to correct the result of the year based on the merchandise consumed, depreciation provisions for tangible fixed assets, provision of all types of provisions, accrual of certain income and expenses, completion of the Corporate Tax entry once all the previous adjustments have been made and, finally, the entry to regularize income and expenses and close the year.
If the Tax Agency detects significant variations in the latest VAT returns with respect to previous returns, it may carry out an inspection of said periods.
It's a good time to consider a software change ; in this sense, Sage offers solutions for all types of sectors and clients , from large companies to freelancers.
Outstanding customer balances should be reviewed and actions to recover outstanding debts should be intensified.
There is a month and a half ahead in which the sales departments are busy closing deals, so that the photo finish shows them in the best possible light, while, on the other hand, stocks are monitored in preparation for the end of the year and the administration departments are beginning to feel the pressure of the workload that is approaching.
Seven points to consider when closing the 2016 financial year
For accounting departments , the accounting closing calendar begins with the last tax settlement of the year in January 2017. Once the VAT settlements , payments on account russian phone number whatsapp and annual summaries have been made, the margin of action on the result of the year is considerably reduced.
But before entering the final stretch of closing the accounting year , there are some points that we must take into account:
Companies with a turnover of more than 10 million euros will have paid 23% of their profit in advance, so when it is time to pay corporate tax, the settlement will no longer be so painful, as the effort has already been made in advance.
If the result is estimated to be good, expenses can be anticipated , such as pending repairs to facilities or vehicles, or why not, a detail can be given to the employees, in the form of a bonus , since they have contributed with their effort to the good result of the year. In relation to the investment in fixed assets, it must be taken into account that only the proportional part of the annual fee will be amortized ; that is, if we buy a fixed asset of €12,000 on December 1 and the useful life of the fixed asset is 10 years, only €100 will be deducted as an expense in the year, so this would not be the way to reduce the profit in this year, even if everything is paid in 2016.
The accounting can be reviewed, since from January the workload will be increased with the completion of the closing entries . The most common year-end closing adjustments are: reclassification of debts from long-term to short-term, entry of variation in stocks to correct the result of the year based on the merchandise consumed, depreciation provisions for tangible fixed assets, provision of all types of provisions, accrual of certain income and expenses, completion of the Corporate Tax entry once all the previous adjustments have been made and, finally, the entry to regularize income and expenses and close the year.
If the Tax Agency detects significant variations in the latest VAT returns with respect to previous returns, it may carry out an inspection of said periods.
It's a good time to consider a software change ; in this sense, Sage offers solutions for all types of sectors and clients , from large companies to freelancers.
Outstanding customer balances should be reviewed and actions to recover outstanding debts should be intensified.