Year End Closure Guide for Accountants &

Management – March 2020

  Last month of the financial year 2019-20 is about to end and this calls for certain checkpoints that each business shall ensure before they close the financial year. Our team of experts have listed below points to ensure accountants and management are on top of the year end checklist and the same have been listed below for your perusal. 1. Deduct TDS on year end provisions This has been observed that company generally fails to deduct TDS on year end provision of expenses like Audit Fees, Annual Filing Charges etc. 2. Verification of Closing Stocks as on 31.03.2020 In tax audit cases, also for closing of books, we need to have quantity-wise & item-wise value of closing stocks as on 31.03.2020. 3. Collecting Loan & FD statements Accountants are advised to collect all running loans, fixed deposits and records actual/accrued interests properly. 4. Taking balance confirmations of all running parties Accountants are advised to collect balance confirmations and ledgers of all sundry creditors & sundry debtors and reconcile the balances. This needs to reconcile with 26AS. 5. Taking proofs from employees against their Investment mentioned in their declaration and deduct balance TDS Accountants might deduct TDS as per declaration filed by employees in the beginning of financial year. But in many cases, it has been found that employees fail to invest as mentioned in their declarations, hence it is advisable to collect all proofs as mentioned in the declaration and re-compute tax liability & deduct balance TDS while making payment of salary for March month in case anybody fails to furnish investment proofs. 6. Reconcile Inter-branch balances Company should reconcile inter-branch balances otherwise closing company’s books at year end would be challenging. 7. Taking reimbursement sheets from all employees Accountants should take reimbursements sheet from all employees including directors related to FY 2019- 20 and record all expenses related to FY 2019-20 in the same year only. It has been found in many cases that accountants fail to take these sheets timely and records these expenses in next financial year. 8. Collecting Bank Statements Keep downloaded bank statements available with you and maintain BRS as applicable. 9. Download all GSTR-2As Accountants are advised to download all GSTR-2A related to FY 2019-20 and record GST inputs if it hasn’t been recorded except ineligible ITC. If any input recorded in books is not appearing in GSTR-2A, accountants are advised to highlight these cases to the management to be taken up with the concerned parties for corrective action. 10. Reverse GST Inputs if payment pending or not made In cases where company has recorded GST Inputs and it has been more than 180 days and payment hasn’t been made so far, company needs to reverse these Inputs and pay the corresponding tax liability. 11. Double check the income where GST not paid or paid at lower rate In all cases, where GST hasn’t been paid or paid at lower rate, please reconfirm the same with your consultant. In case of exempt export supplies, please ensure that proper LUT is in place for the concerned FY 2018-19. 12. Double check the expenses where TDS hasn’t been deducted In all cases where TDS hasn’t been deducted on expenses, please reconfirm the TDS applicability with your consultant & take corrective action, if needed. 13. Payment of adequate Advance Tax Since we are in the end of the financial year please check whether advance tax has been paid properly, pay balance if required otherwise interest would be charged. 14. Record Foreign Exchange Fluctuations Properly In case of foreign parties or assets/investments where balance is outstanding/pending, ascertain foreign currency value as on 31/03/2020, apply AS-11 to record fluctuation difference properly. Take help of your consultants if required. 15. Reconcile unconsumed challans Reconcile unconsumed challans as per Traces as on 31.03.2020 with the debit balance showing in the books. 16. Match GST ledger balances Reconcile GST ledger balances as on 31.03.2020 (Electronic Cash Ledger, Electronic Credit Ledger & Electronic Liability Ledger) with the balances showing in the books. 17. GST on Advances Check whether GST has been paid on advances appearing/received from customers as on 31.03.2020 18. TDS on Advance Payments Check whether TDS has been paid on Advance Payments made to suppliers, especially where advance balances are appearing in the books as on 31.03.2020. 19. ESI or PF Registration If these registrations were not applicable earlier due to lower number of employees, please recheck their applicability and apply for registration under EPF/ESI if anytime during the year number of employees have exceeded the number 20/10 respectively. 20. GST Refund of FY 2017-18 31/03/2020 is the last date to apply for the refund of GST related to FY 2017-18. Make sure company has applied, if applicable. 21. Record Salary of Founders In many cases especially in Startups, we have observed that founders/directors don’t take salary properly during the year & take final call on this amount after the end of financial year while filing their personal ITRs later in July, where company ends up paying their TDS component with interest. Accountants & management are advised to discuss the same and record the final amount in March 2020 itself to pay TDS accordingly. 22. Recording Depreciation on Fixed Assets Accountants are advised to make sure that proper depreciation as per Schedule II of Companies Act, 2013 has been recorded on Fixed Assets appearing in companies’ books. 23. Loan to Directors or Interested Parties Loan to directors or any other person in whom director is interested is prohibited by Companies Act, 2013 subject to certain exceptions. Accountant needs to make sure the company is not providing or would not provide any such loan or guarantee. 24. Amend Invoices of FY 2018-19 In case of exports related to FY 2018-19, last date to make any amendment in invoice or to add any invoice is 31/03/2020. Company needs to make sure all such amendments are done by 31/03/2020. 25. Last Date to file ITR of FY 2018-19 If by any reason company or any of its employees have failed to file ITR of FY 2018-19 by due date & haven’t yet filed, 31/03/2020 is the last date to file belated return of FY 2018-19 with late fee up to Rs 10,000. Post 31/03/2020 these ITRs cannot be filed, make sure all such returns have been filed.