The end of the tax year feels a long way off in September. But the groundwork you lay now — tying up loose ends, reviewing your numbers, planning ahead — can make a real difference when it matters.
Here is a practical guide to what you can do before December to set yourself up well.
Preparing Your Accounts for Year-End
Getting your records in order now means far less scrambling later. Work through these five steps:
Check your income and expenses are recorded correctly. Go through your transactions for the year so far and make sure everything is coded correctly. It is much easier to fix a miscategorisation now than in January.
Reconcile your bank accounts. Make sure your accounting software matches your bank statements. If there are unexplained differences, find them now.
Organise your receipts and supporting documents. Gather receipts, invoices, and any other paperwork that supports your expenses. If you are using Xero, make sure everything is attached or filed properly.
Follow up on unpaid invoices. Outstanding invoices affect your income figures. Chase anything that has been sitting unpaid for more than 30 days — both for your cash flow and your year-end picture.
Review bills and subscriptions. Are there any standing costs that are no longer relevant to your business? Now is a good time to cancel anything you no longer need before it rolls into another year.
Planning for Your Taxes
Understanding your tax position before year-end gives you options. After year-end, most of those options close.
Know what you have earned and what you have spent. Get a clear picture of your profit so far this year. Your accountant can help you run a quick estimate if you are unsure.
Consider purchasing equipment now. If you need to buy equipment or assets for your business, purchasing before the year-end means you may be able to claim the Annual Investment Allowance (AIA) against this year's tax bill — rather than waiting until next year.
Claim all allowable expenses. Make sure you are not leaving anything on the table. Common ones people miss include use of home as office, business mileage, professional subscriptions, training costs, and bank charges.
Talk to your accountant. If you have had an unusually good or unusually difficult year, there may be planning steps worth taking before the year closes. The earlier you have that conversation, the more options are available to you.
Get your paperwork ready. Start pulling together what your accountant will need: bank statements, invoices, expenses records, and any other income sources (rental income, dividends, employment income if applicable).
Budgeting for the Year Ahead
Once you have reviewed this year, use what you have learned to plan the next one.
Review this year's numbers honestly. Where did money come from? Where did it go? Were there any surprises — costs that crept up, income that came in lower than expected?
Set some goals. Not just revenue targets, but financial habits. Maybe that is reconciling monthly rather than quarterly, or finally moving to digital record-keeping ahead of Making Tax Digital.
Create a simple budget. It does not need to be complicated. A rough monthly projection of income and key costs gives you something to measure against — and makes it much easier to spot when something is off.
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