The main job of our outsourced accountant is to prepare Year End accounts and tax returns on behalf of the client, this includes the following.
When Clients’ Bookkeeping is Up to Date
Check whether opening balances agree with the last set of accounts. If so, post period trial balance in the accounting software. If they do not agree, bring forward last year figures and post the movement trial balance.
When Clients’ Bookkeeping Needs Doing
- Prepare summaries of Sales, purchase and expenses.
- Enter bank transactions into a spreadsheet and allocate proper nominal codes.
- Prepare summary of any loan, HP, and mortgage accounts
- Post all the items to accounting software.
Once complete we will check all items are posted in proper nominal codes with correct description and reference, and compile a working file along with which includes control accounts for Balance Sheet items and necessary schedules for the Profit and Loss account.
Balance Sheet Completion
- Ensure FAR is correct and reflects additions / deductions during the year.
- Check correct depreciation charges and carry forward values of assets.
- Stock is stated as certified by valuer or owner.
- Trade debtors agree to book keeping aged listing or client list. If not, investigate and list out the reason(s).
- Prepayments are properly provided for and opening prepayments are duly accounted for.
- Cash balance is reconciled with petty cash book.
- Bank balances are reconciled with closing statement.
- Trade creditors agree to book keeping aged listing or client list. If not, investigate and list out the reason(s).
- Accruals are duly provided for expenses and opening accruals are properly dealt with.
- Check Directors current account to ensure all transactions are private and the closing balance is credit. In case of a debit balance, check for additional provision of dividends or possibility of repayment of loan within 9 months. If none is feasible, provide additional tax u/s 455
- In case of sole trader/ partnership, ensure items posted to capital are all private. Check sources of capital injections, if any.
- Ensure Corporation Tax liability is provided in case of profits and supported by proper calculation. Check claim of general pool, special pool and AIA. In case of losses, check for brought forward losses and ensure correct figures are carried forward
- Drawings/dividends drawn need to justify the standard of living of the client.
- Check reconciliation of loan, mortgages and HP.
- Evaluate dividends provided and that they are also optimum for personal tax.
Profit & Loss Account Completion
- Reconcile sales with submitted VAT returns. In case of non VAT clients, ensure it does not cross the VAT registration threshold.
- Check level of closing stock with earlier years and client certificate.
- Evaluate gross profit and net profit ratio with earlier years. Check for reasons in case of significant variance.
- Check of purchases and direct costs.
- Comparative analysis of all expense to be carried out. Any expense with more than 10% variance to be checked in detail.
- Have a logical view of the P&L statement to ensure it makes sense and reflects a fair picture.
Queries in the above process will be listed down and communicated to the client.
Necessary amendments will then be carried out in light of replies to queries or a review of the financial statement.
Closing journal to be prepared (in case of book keeping clients) to ensure book keeping figures align with Year End figures.
For more information on the Accountant role, contact your UK Based, Regional Consultant by clicking here