Year-end accounts for limited companies: what to prepare before your accountant asks

Year-end accounts always feel urgent at the end, but most of the work is gathering, not calculating. For a limited company, the accounts, the corporation tax return, and the Companies House filing all draw on the same records. When those records are incomplete, the filing gets delayed, estimates creep in, and questions from your accountant arrive in a rush. A short preparation routine, started a few weeks before the year end, avoids almost all of it.

This guide covers what to prepare, in what order, and the five checks that catch the commonest problems before they become filing delays.

Start with the bank and the balance sheet

The first step is reconciliation. Every bank account, credit card, and loan account should be reconciled to the year-end date, with no unexplained items left sitting in the reconciliation. Unexplained items are the single biggest cause of year-end delay, because each one has to be investigated before the accounts can be finalised.

Work through the balance sheet in the same pass. Supplier balances should agree with supplier statements, customer balances should agree with your sales ledger, and any directors loan account should be reviewed line by line. If the directors loan account is overdrawn at the year end, flag it early. The tax treatment depends on how and when it is repaid, and sorting it out after the accounts are drafted is far more expensive than dealing with it before.

Fixed assets, stock, and accruals

Next, check the items that are easy to forget. Fixed assets need a simple register: what was bought, when, for how much, and whether anything was sold or scrapped during the year. Missing disposal records are a regular year-end problem, because an asset that no longer exists still sits in the books until somebody confirms it is gone.

If you hold stock, count it or value it properly at the year end, and keep the workings. Stock is often estimated at the last minute, and an estimated stock figure flows straight into profit, so a rough number here means a rough profit figure.

Then run through accruals and prepayments. Rent, insurance, subscriptions, and professional fees paid in advance or in arrears all need adjusting so that only the current year's cost appears in the current year's accounts. A year with no accruals at all is usually a sign that they were missed, not that none existed.

Payroll, VAT, and corporation tax

Payroll records should be complete to the year end: P60s issued, benefits and expenses in kind recorded, and any salary or dividend mix for directors agreed. Dividends need proper paperwork, a board minute and a dividend voucher, and they can only be paid out of distributable profits. A dividend paid without that paperwork is not a dividend in law, whatever the bank transfer says.

VAT should be reconciled too. The VAT returns for the year should agree with the sales and purchase ledgers, and any partial exemption or flat rate adjustment should be worked out before the accounts are drafted, not discovered afterwards. Where the VAT position changes the profit figure, it is far easier to correct it now.

Finally, think about corporation tax while there is still time to act. Allowances, reliefs, and the timing of expenditure can all affect the bill, but only if they are considered before the year end. Once the year has closed, most planning options have closed with it.

The five checks before you hand over

Before you send anything to your accountant, run five checks. First, are all bank accounts reconciled with nothing unexplained? Second, do supplier and customer balances agree with statements? Third, is the directors loan position known and documented? Fourth, are dividends supported by minutes and vouchers? Fifth, do the VAT returns agree with the ledgers for the year?

If you can answer yes to all five, the accounts process is usually straightforward. If you cannot, each no is a task to complete before the handover, not a question to leave for your accountant to chase.

When to get help with the year end

A clean year end is mostly a matter of routine: records kept through the year, reconciliations done monthly, and a short preparation pass before the deadline. Companies that struggle at year end are rarely companies with complicated affairs. They are companies whose monthly routine slipped, and the year end is where the backlog lands.

If your year end is approaching and the five checks above show gaps, getting help now costs less than a late filing penalty and a rushed set of accounts. See our guides on accounting outsourcing services and financial accounting outsourcing services for what a prepared year end covers and how the filing calendar works across the year.

Start the preparation pass this week, while there is still time to fix what it finds. The accounts themselves are the easy part. Having the records ready is what makes them easy.