How to Do Year-End Accounts for a Small Business

What Are Year-End Accounts?

Year-end accounts (also called annual accounts or statutory accounts) are the financial statements prepared at the end of your business's accounting year. They summarise everything that happened financially during the year:

Profit & Loss (Income Statement): Revenue, expenses, and net profit or loss for the year

Balance Sheet: What the business owns (assets) and owes (liabilities) at year-end

Cash Flow Statement: (required for larger businesses) How cash moved during the year

These documents serve multiple purposes: they're used to calculate your tax liability, may be required by your bank or investors, and for limited companies, are often filed with the government.

When Is Your Year-End?

Your accounting year can end on any date — it doesn't have to be 31 December. Many businesses use 31 March, 30 June, 31 March, or the date their business was incorporated.

Know your year-end date. Everything in this checklist is timed around it.

Year-End Preparation Checklist

2–4 Weeks Before Year-End

Review outstanding invoices. Chase any overdue invoices that are still collectible. Invoices you've given up on may need to be written off as bad debt.

Review outstanding bills. Are there supplier bills you've received but not yet paid? These need to be recorded even if payment happens after year-end.

Review your inventory. If you hold stock, do a physical count. Your closing inventory value goes on your balance sheet.

Review your fixed assets. Any major equipment or assets purchased or disposed of during the year need to be recorded.

Ensure all transactions are recorded. Nothing missing from your books.

At Year-End

Cut off. Income and expenses belong in the period they were earned/incurred, not when cash moved. Make sure invoices issued before year-end are in this year's accounts even if payment arrives next year (accrual basis), or ensure you've counted only cash received (cash basis).

Reconcile your bank accounts. Match every item in your bookkeeping to your bank statement. No unexplained differences.

Reconcile credit card statements. Same principle — every expense on your card should be in your records.

Reconcile your accounts receivable. The invoices showing as unpaid in your system should match the reality of what clients owe.

Reconcile accounts payable. The bills showing as unpaid should match what you actually owe suppliers.

After Year-End

Prepare a list of prepayments. If you've paid for something that covers the next year (e.g. annual insurance), part of that expense belongs next year. Note these for your accountant.

Prepare a list of accruals. Expenses incurred before year-end but not yet invoiced (e.g. electricity you've used but the bill arrives next month) may need to be accrued into this year.

Depreciation. Fixed assets reduce in value over time. Your accountant or software will calculate depreciation for the year.

Directors' loans and drawings. If you've taken money out of the business or put money in during the year, ensure this is recorded correctly.

What Your Accountant Needs

If you're using an accountant to prepare your year-end accounts, they'll typically need:

Access to your bookkeeping records (or an export)

Your bank statements for the full year

A list of any assets purchased or sold

Your year-end debtors list (who owes you and how much)

Your year-end creditors list (who you owe and how much)

Any relevant contracts, loan agreements, or leases entered into during the year

The cleaner your records, the faster and cheaper the accountant process.

Common Year-End Mistakes

Leaving reconciliation until after year-end. Errors are much harder to identify 3 months later.

Missing expense receipts. Without receipts, expenses may not be deductible.

Forgetting home office or vehicle expenses. Sole traders often miss these.

Not writing off bad debts. An invoice from 2 years ago that will never be paid is still sitting in your receivables, overstating your assets.

Confusing personal and business expenses. Keep them separate throughout the year — don't try to sort it out at year-end.

Year-End Reports from Quotation Expert

Quotation Expert's reports give you the core documents for year-end preparation: profit & loss by period, sales summary, expense summary, and bank account records. Export your data or share access with your accountant so they can see your full-year transactions without manual re-entry.