Profit & Loss Year-End Review

Finalising your financial year requires a thorough review of your Profit & Loss (P&L) Report. This ensures that every transaction is in the correct category, the timing of income and expenses is accurate, and your reported profit is "accountant-ready."

Use this checklist to identify, verify, and correct your data within SortMyBooks before your final year-end meeting.

How to Access Your Report

To begin your review, you need to pull the correct data view in SortMyBooks:

1. Navigate to the Reports tab on the main menu.
2. Select Ledger Reports and then click on Profit & Loss.
3. In the Detail Box on the left side of the screen, ensure you have selected Include Sub-Nominals. This allows you to see the breakdown of your accounts.
4. Select your Date Range (e.g., your full financial year).
5. Click Apply to generate the view.

1. Expense Integrity & Fixed Assets

Scan your expense categories for consistency and accuracy.

• Monthly Consistency: Review recurring costs like Rent, Insurance, and Utilities. Ensure you have 12 months of entries. If a month is missing or doubled, investigate the source transaction.

• Asset Purchases: High-value items (e.g., vehicles, specialised machinery, or high-end IT hardware) should not remain in your expense categories. These must be moved to the Balance Sheet as Fixed Assets via a Journal Entry to ensure correct depreciation. How to enter Fixed Assets

• Reclassify Sundry: Review significant balances in Sundry or Miscellaneous. Reclassify these to specific categories (e.g., Repairs or Travel) to provide clarity for your accountant.

• Non-Deductibles: Identify expenses that aren't tax-deductible, such as Client Entertainment or Fines/Penalties, and ensure they are coded to specific accounts for easy adjustment during tax filing.

2. Payroll & Wages Reconciliation

Your P&L must accurately reflect your total labour costs and statutory obligations.

• Payroll Software Alignment: Cross-reference your payroll totals in payroll software with your Wages & Salaries nominal codes in SortMyBooks. The instructions on Year-End Wages Control.

• Nominal Coding: Verify that Employer PRSI and Net Wages are hitting the correct codes.

3. Accruals & Prepayments

To ensure your profit is recorded in the correct period, you must adjust for timing differences.

• Prepayments: If you paid an annual insurance premium in October, only the portion relating to the current year belongs in this P&L. The remaining months should be moved to the Balance Sheet as a Prepayment. Video: How to enter Prepayments

• Accruals: Record expenses you have incurred but haven't been invoiced for yet (e.g., December utilities arriving in January or your accountant's year-end fee). Video: How to enter Accruals

4. Income Recognition

• Cut-off: Ensure income is recorded when it was earned, not just when the cash was received. If you’ve finished a job but haven't invoiced, you may need to accrue that income.

• Bad Debts: Review your Aged Debtors. If an invoice is unlikely to be paid, write it off or provide for it to ensure your profit isn't artificially inflated.

5. Stock

• Year-End Stock Take: Conduct a physical count on the final day of your financial year. Update the Closing Stock value via a Journal Entry so your P&L reflects the true Cost of Goods Sold (COGS).

6. Director Loans 

• Director’s Loan Account: Review all transactions involving directors. Ensure personal expenses paid by the company are coded to the Loan Account on the Balance Sheet rather than P&L expenses.

7. Corporation Tax

• Corporation Tax: Do not post a final Corporation Tax figure until you have consulted with your accountant. However, ensure all preliminary tax payments made during the year are correctly recorded.

Note: If you identify a discrepancy, you can click directly into the figure in SortMyBooks to drill down into the individual transactions for a quick correction.

Year-End P&L Checklist

Category	Action Required	Checked?
Fixed Assets	Large purchases moved to the Balance Sheet.	☐
Sundry/Misc	All significant balances reclassified or cleared.	☐
Payroll	Reconciled SortMyBooks wages with payroll software reports.	☐
Adjustments	Accruals and Prepayments were discussed with the accountant.	☐
Stock-Take	Final inventory value journaled (Asset 13000 / COS 59000).	☐
Director’s Loans	All transactions involving directors were reviewed	☐
Taxes	Corporation Tax provision confirmed by the accountant.	☐