Year-end is no fun for anyone. And if you leave your financial admin until the last minute, it can turn into a costly and stressful scramble. But with a little forward planning, closing out your financial year doesn’t have to be painful, or at least can be a little less painful. It can also be a great opportunity to reflect, reset, and set yourself up for a stronger next year.
Here’s a simple checklist for South African SMEs to prepare for year-end:
1. Reconcile your accounts. Make sure your bank accounts, credit cards, and loan statements match what’s in your accounting system. Clear up any discrepancies or outstanding items.
2. Chase overdue invoices. Year-end is a good time to follow up on unpaid invoices. It boosts your cash position and makes your debtors’ list more accurate. Raise provisions for bad debts on any outstanding debtors which you have concern over.
3. Record all expenses. Log any outstanding bills, purchases, or petty cash transactions. Don’t forget expenses paid personally on behalf of the business. Also don’t forget to accrue for expenses you know you have incurred, but have not as yet received invoices (for example, a purchase order you may have placed).
4. Take stock. If you carry inventory, do a proper stock count and write off any damaged or obsolete items. This affects your cost of sales and tax liability.
5. Review fixed assets. Update your fixed asset register with new equipment bought or sold. Consider depreciation and whether any items need to be written off.
6. Finalise payroll. Make sure your payroll records are complete and that SARS filings (PAYE, UIF, etc.) are up to date. Also check if any bonuses or incentives were paid.
7. Prepare VAT and tax records. Make sure all invoices are VAT-compliant and input claims are supported by proper documentation. Reconcile the SARS statement of account for your various tax types to the balance on your accounting system.
8. Meet with your accountant or bookkeeper. If you have one, schedule a meeting to review your draft numbers and flag anything unusual before submission.
9. Wrap Up Annual Filings and Compliance. Make sure all your year-end filings are in order. This includes financial statements, tax returns, and your CIPC annual return. Double-check if your business needs an audit or independent review based on your Public Interest Score (PIS). Staying compliant helps you avoid penalties and keeps the business funder-ready.
10. Plan for the new financial year. Set budget targets, review cash flow projections, and consider any changes to pricing, cost structures, or staffing.
With this checklist in hand, you’ll move into the new year with clean books, accurate reports, and fewer surprises. And the earlier you start, the smoother it will be.