Account Finalization Procedure

Account finalization is the process of preparing and presenting the financial statements of a business at the end of a financial year. It involves reconciling all accounts, making adjustments, reviewing and analyzing the results, filing tax returns, and complying with regulations.

The steps involved in account finalization may vary depending on the nature and size of the business, but generally, they include the following:

• Checking and entering all transactions that have not been recorded in the accounting software or system.
• Reconciling the bank statements with the cash book and preparing a bank reconciliation statement.
• Reconciling the sales, purchases, output tax, and input tax with the GST returns filed during the year.
• Verifying the opening balances, closing balances, and ledger balances of all accounts.
• Making year-end adjustments for accruals, prepayments, depreciation, bad debts, provisions, and so on.
• Preparing the trial balance and ensuring that the total debits and credits are equal.
• Preparing the trading account, profit and loss account, and balance sheet according to the accounting standards and principles.
• Reviewing and analyzing the financial statements and identifying any errors, discrepancies, or issues that need to be resolved or explained.
• Preparing the notes to the accounts and the schedules and annexures that support the financial statements.
• Filing the tax returns and paying the tax liabilities as per the tax laws and regulations.
• Complying with any other legal or statutory requirements that apply to the business.

How can I identify which expenses are eligible for tax deductions in my business?

If an expense is incurred to generate income and serves a legitimate business purpose, it is considered tax-deductible. Here are a few examples:

1. Employee salaries & benefits
2. Office expenses and supplies
3. utilities charges for electricity, water, telephone, and internet charges
4. Repair and maintenance
5. Professional services fee
6. Rental of premises with tenancy agreement filed
7. Business insurance and license renewal

What is the next step when my account is finalized?

In the case of an Sdn Bhd account, upon completion of the report, the next steps involve:

REPORT	PURPOSE	DEADLINE
Audited report / Financial Statement	To make sure the management report accurately & fairly represents the company's financial figures.	6 months after the financial year-end
Tax Computation	To show annual chargeable tax adjustments/tax return to profit of the company to LHDN	7 months after financial year-end
Lodgement of Annual Report	The audited financial statement lodged with SSM	Within 30 days after the audited financial statements have been circulated to members

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