7 Things To Prepare For Year-End
It’s the month of December. It has been raining for the past 1 week and don’t everyone love the cold weather. Which kinds of give us the feel of Christmas. While the Year 2019 is coming to an end in 16 days. Are you or your organization prepared and ready for your company end of year submission?
1. Profit and loss statement (P&L)
Profit and Loss statement is one of the financial statements of a company. It will show you the company’s revenues and expenses over a period, likely to be yearly for tax reporting and indicates how the revenues are transformed into the net income or profit. It can help management to steer the entity’s financial direction for next year. For example, how much of advertising/marketing effort inversely helps to bring in sales revenue? How much more manpower is needed to cater to the increasing outsourced payroll management?
You may click on this link to download a general P&L sample from IRAS: https://www.iras.gov.sg/irashome/Businesses/Self-Employed/Filing-your-taxes/Preparing-Statement-of-Accounts/
2. Balance Sheet
A balance sheet reports a company’s assets, liabilities, and shareholders’ equity at a specific point in time. It provides a snapshot of what a company owes and owns and also how effectively a company’s management uses its resources. Below are a few examples of the items on a typical balance sheet.
- Cash and cash equivalents
- Marketable securities
- Accounts Receivable
- Rent, Tax, Utilities
- Salary payable
- Dividends payable
Do note that if your business earns a revenue of $500,000 or more, you have to submit via myTax Mail or post the certified Statement of Accounts of your business at the same time when you file your tax return. (Statement of Accounts comprises the Profit and Loss account and Balance Sheet).
Need help in preparing the balance sheet? You may click on this link to download a general balance sheet sample from IRAS: https://www.iras.gov.sg/irashome/Businesses/Self-Employed/Filing-your-taxes/Preparing-Statement-of-Accounts/
3. Statement of Cash Flow
The statement of cash flow shows where the money is coming from and what it is being spent on. Furthermore, cash is the livelihood of any business and a cash flow statement is able to show the ability of a business to pay its creditors. In cash flow statements, it can be categorized into operating activities, investing activities and lastly financing activities.
4. Forecast vs Budget
The forecast is done at every start of the year and by that, companies are able to allocate a budget to every department to run its operations.
After knowing either your Profit and Loss or Balance Sheet statement, guess the management is pretty aware whether are the numbers forecast near to the actual numbers and have any of the budgets exceed?
5. Budgeting for Next Year
Budget planning is a strategic opportunity! Like any company, AYP Group has already listed down what are the plans for the year 2020.
It is a yearly exercise where business units submit their numbers to establish next year’s budget. From marketing to operations to finance, all departments have their budget cost on their fingertips. This process is a valuable exercise for controlling finances, funding current commitment or make more confident decisions.
Do you know that tax in Singapore is one of the lowest rates in the world (17%) for corporations and individuals? It is calculated on the basis of the company’s chargeable income.
Do take note that, the tax must be paid within one month from the date of the Notice of Assessment (NOA) or else a 5% penalty can be imposed on the overdue tax.
And lastly the most important of all will be the 13th-month bonus! Employees are paying close attention to what the company is going to announce while employers are also hoping to provide some good news after looking through the Balance sheet or Profit and Loss statement. So, let’s wait and see how it goes, shall we?
That’s all folks, those are the 7 things you can prepare to close off year-end with a BOMB! Besides that, hang on tight for another 16 days and let’s welcome the New Year with a big HUG. I believe you can do better than this year.
Take a leap of faith and behing this wondrous new year by believing
– Sarah Ban Breathnach