An approaching new year gives you opportunity to measure your business performance over the past 12 months as well as prepare for the future. Proper end-of-year bookkeeping is necessary for businesses to balance and close their books from the past year, allowing them to then draft accurate annual financial reports.
What Businesses should Include in their Annual Bookkeeping
Businesses should take note of the following accounting entries to optimize their annual bookkeeping:
- Currency adjustment
- Provision for unpaid leaves
- Provision for gratuities
- Stock adjustment
- Depreciation calculation
- Amortization calculation
- Unearned Revenues
Why These particular Entries are of Importance to Businesses
- Enables better planning for expenses to come, such as gratuities or unpaid leave. Although they remain estimations, these coming expenses cannot be forgotten.
- Currency adjustments will help to ensure business stability and to neutralize the effects of the variation of exchange rates.
- Accurate recording of the stock take, prior to the inventory adjustment in the balance sheet, is necessary to ensure that the business meets its accounting objectives.
- Adjustments will also be required for unearned revenues, while the depreciation and amortization of business assets will require calculation prior to being transferred to the correct accounts – if this has not been done monthly.
End-of-year Bookkeeping in the New Fiscal Context
End-of-year adjustments are necessary to keep your books updated, prepared for the incoming ‘tax time’ and the year ahead.
With the new UAE corporate tax coming into effect in June 2023, having updated books is mandatory.
CTC Accounting can help you, do not hesitate to contact us here.