Year-End Close Checklist
Work through this year-end checklist to reconcile, adjust and close your books ready for accounts and tax.
The year-end close is the point where you turn a year of day-to-day bookkeeping into a clean, reliable set of figures. Get it right and your accounts, VAT position and tax filings will hang together with far less stress. Get it wrong and small errors compound into late nights, awkward queries from your accountant and, worse, mistakes that reach HMRC or Companies House. Whether you trade as a sole trader or a limited company, the steps below give you a repeatable routine to follow at your accounting reference date.
Work through the checklist in order. Each section closes off one area so that, by the time you review your trial balance, there are no loose ends left to unpick. If you are new to the wider process, start with the year-end and annual accounts hub for the full picture.
Reconcile bank and control accounts
Begin with the bank reconciliation. Match every transaction in your books to your bank statements for each account, including credit cards, loans and savings. Any unreconciled item is a red flag: a duplicated entry, a missing receipt or a transaction posted to the wrong period.
Then reconcile your control accounts. The figures in your books should agree with supporting schedules:
- Sales ledger (debtors) to your outstanding invoice list
- Purchase ledger (creditors) to unpaid supplier bills
- VAT control account to your submitted and outstanding returns
- PAYE and NIC to payroll records
- Director’s loan account, if relevant, to the underlying movements
If a control account will not balance, resolve it now. Strong reconciliations are the foundation of trustworthy accounts, and they make the rest of the close straightforward.
Chase debtors and creditors
Once the ledgers are reconciled, review who owes you and who you owe. Chase debtors so your year-end balance reflects amounts that are genuinely collectable. Where a debt is clearly irrecoverable, write it off so profit is not overstated. Our guide on dealing with late payers can help you tighten collection.
On the creditors side, make sure every supplier invoice relating to the year has been entered, even those that arrived after the period end. Unrecorded purchases are one of the most common causes of an understated cost base.
Accruals and prepayments
To present a true and fair view under UK GAAP (including FRS 105 for micro-entities), costs and income must fall in the period they relate to, not simply when cash moves.
- An accrual brings in a cost you have incurred but not yet been billed for, such as accountancy fees or utilities used before year-end.
- A prepayment removes a cost paid in advance that relates to the next period, such as insurance or an annual software subscription.
Review recurring expenses and any large one-off payments near the year-end date, and post the adjusting journals so each lands in the correct year.
Stock count and valuation
If you hold inventory, carry out a physical stock count as close to year-end as possible. Count what is actually on the shelf and compare it to your records, investigating any differences.
Value stock at the lower of cost and net realisable value. Write down anything obsolete, damaged or unsellable so your closing stock figure is realistic. A reliable stock figure feeds straight into both your balance sheet and your cost of sales.
Fixed asset register review
Reconcile your fixed asset register to the balance sheet. Confirm that every asset still exists and is in use, and that purchases made during the year have been capitalised correctly rather than expensed.
| Step | What to check |
|---|---|
| Additions | New assets capitalised at full cost, including delivery and installation |
| Existence | Each listed asset physically present and in use |
| Categorisation | Capital items not wrongly posted to repairs or expenses |
| Funding | Assets bought on finance recorded with the matching liability |
This review also sets you up to claim the right reliefs. See capital allowances explained for how qualifying assets affect your tax position.
Depreciation and disposals
With the register confirmed, post the year’s depreciation charge so each asset is written down over its useful life under your chosen policy. Apply the policy consistently from year to year.
For any asset sold or scrapped, record the disposal: remove the original cost and accumulated depreciation, then recognise the profit or loss on disposal. Forgetting to derecognise disposed assets leaves “ghost” entries that inflate your balance sheet and distort future depreciation.
Review the trial balance
With every area closed, run and scrutinise the trial balance. Compare each line to the prior year and ask whether the movement makes sense. Unexpected swings often point to a posting error or a missing adjustment.
A short review routine catches most issues:
- Are all balance sheet items supported by a reconciliation or schedule?
- Do gross margins and key costs look reasonable against last year?
- Has VAT been accounted for correctly on income and expenditure?
- Are there any suspense or unallocated balances still to clear?
Tidy bookkeeping throughout the year makes this far quicker; our bookkeeping guides cover the habits that pay off at close. For the conversion of these figures into filed accounts, read preparing statutory accounts .
Handover to your accountant
A clean handover saves fees and turnaround time. Provide your accountant with a clear, complete package:
- The final trial balance and a copy of the bookkeeping file
- Bank statements and reconciliations for every account
- Supporting schedules for debtors, creditors, accruals, prepayments and stock
- The fixed asset register with additions and disposals
- VAT returns, payroll summaries and any loan or finance agreements
The better organised the handover, the fewer queries come back to you, and the faster your accounts can be finalised and submitted. For a refresher on the wider workflow, browse our accounting how-to guides .