Investing in a final quarter yearend review

Many businesses have a 31 March year end date, which means they are now in the last quarter of their current financial year and have an opportunity to review their business finances.

The last quarter of the year is a crucial time for businesses to review, evaluate, and prepare for both year-end and the year ahead. Here are some business finance-related tasks worth focusing on:

1. Year-End Financial Review

• Reconcile Accounts: Ensure all bank accounts, credit cards, and financial transactions are reconciled.
• Review Outstanding Invoices: Follow up on overdue payments to improve cash flow before the year’s end.
• Analyse Profit and Loss Statements: Identify trends, key expenses, and areas for improvement.

2. Tax Planning

• Utilise Allowances: Maximise annual allowances like the Annual Investment Allowance (AIA) or other reliefs before the tax year ends.
• Plan for Corporation Tax: Estimate your liability and consider deferring or accelerating expenses and income to optimise tax.
• VAT Review: Ensure VAT returns are up to date and assess eligibility for any VAT schemes.

3. Budget and Forecasting for the Next Year

• Set a New Budget: Base it on this year’s performance and anticipated changes.
• Forecast Cash Flow: Account for seasonal fluctuations and expected outlays.
• Scenario Planning: Prepare for various outcomes such as economic changes or market shifts.

4. Capital Expenditures

• Investment Opportunities: Evaluate if there are capital expenditures worth making to take advantage of or other tax benefits.
• Equipment Upgrades: Replace ageing equipment to improve efficiency or productivity.

5. Employee and Payroll Planning

• Bonuses and Incentives: Plan and allocate year-end bonuses if applicable.
• Review Payroll Systems: Ensure compliance with HMRC regulations and confirm all data is accurate.
• Pension Contributions: Consider making employer contributions to employee pension schemes, which may also reduce taxable profits.

6. Review Financing Options

• Debt Management: Refinance existing loans or pay down high-interest debt to improve financial health.
• Credit Facilities: Check if your business has access to adequate credit facilities for the next year’s needs.
• Grants and Incentives: Research government or local grants that align with your business activities.

7. Inventory Management

• Stocktaking: Conduct a thorough inventory review to manage obsolescence and reduce holding costs.
• Discount Slow-Moving Stock: Use end-of-year sales or promotions to free up cash tied in inventory.

8. Corporate Compliance and Governance

• Review Policies and Contracts: Update supplier agreements, insurance policies, and service contracts.
• File Annual Returns: Ensure your company’s filings with Companies House are current.
• Update Director Records: Review and confirm director and shareholder information.

9. Cost Management

• Assess Fixed and Variable Costs: Identify areas for cost reduction without compromising quality or service.
• Review Supplier Contracts: Renegotiate terms to secure better pricing for the coming year.
• Utility Costs: Shop around for better deals on utilities like energy and telecoms.

10. Plan for Growth

• Explore New Markets: Research potential new customer bases or territories.
• Marketing Budgets: Allocate funds for marketing initiatives that will drive growth in Q1 of the next year.
• Talent Acquisition: Plan for hiring to fill gaps in your workforce.

11. Insurance and Risk Management

• Renew Policies: Review coverage for liability, property, and other business risks.
• Mitigate Risks: Assess and implement measures to reduce financial and operational risks.

12. Stakeholder Communication

• Update Investors or Shareholders: Provide end-of-year reports to ensure transparency.
• Employee Meetings: Share year-end results and next year’s goals with your team to build morale.
• Customer Engagement: Strengthen relationships with customers through personalised offers or appreciation.

13. Technology Investments

• Software Upgrades: Consider investing in accounting or operational software to improve efficiency.
• Cybersecurity: Strengthen your business against cyber threats, particularly if you manage sensitive customer data.

14. Succession and Exit Planning

• Business Valuation: Assess your company’s value if you’re planning an exit or transition.
• Update Wills and Trusts: Ensure business interests are properly accounted for in personal estate planning.

15. Charitable Contributions

• Make Donations: Consider making tax-deductible contributions to charities or community programmes.
• Community Engagement: Use this as an opportunity to enhance your business’s reputation.

By considering these and other relevant tasks, you’ll not only optimise your financial position for year-end but also set a strong foundation for the next financial year.

Please note, the above check list may contain or exclude issues that are relevant or not relevant to your business. Before taking any action, please call so we can help you create a year end review that is impactful for your specific business circumstances.