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A guide to year-end accounting and tax tune-up

IAS we swiftly approach the year-end, with just over a month remaining, accountants are deeply engaged in readying their books of accounts and essential documentation for financial and tax reporting. As a manager overseeing these intricate accounting tasks during this period, allow me to share some guidelines, reminders and critical deadlines. These are designed to ensure the timely completion of our year-end accounting and tax checklist, mitigating the risk of potential penalties with the Bureau of Internal Revenue (BIR).


Promote early planning and preparation. Motivate employees to proactively plan and prepare for year-end activities. Stress the significance of reviewing financial records and organizing documentation. Ensure that employees have access to essential resources, such as accounting software or tax-related reference materials, to streamline the preparation process.


Establish a comprehensive calendar, and communicate the deadlines and expectations. Develop an intricate schedule detailing all tax-related deadlines. Highlight crucial dates for financial statement preparation, tax return submission and payment responsibilities. Integrate tax and statutory compliance obligations into the timeline, including submission dates, review periods and internal reporting deadlines. Ensure that your team is well-informed about year-end deadlines and expectations by communicating them clearly and in advance. With the comprehensive calendar that you prepared, you can provide a full overview of the tasks, timelines and specific deliverables required. Distribute this calendar among pertinent team members, guaranteeing awareness of essential dates and responsibility for assigned tasks. Highlight the importance of meeting these deadlines and the potential consequences of noncompliance.


Create a tasks checklist and prepare a list of period-end entries. Utilize this checklist as a reference to assist employees stay organized and focus. It's beneficial to pinpoint critical milestones, including data collection, documentation review and submission deadlines, to ensure a clear understanding of the sequence of activities. It is also important to list down all period-end entries as a guide in closing the books of account. Common period-end entries include accruals, prepayments, depreciation and amortization, and inventory adjustments.


Reconciliation of accounts. Perform reconciliation of account balances with its schedules and supporting documents such as bank reconciliation to match cash book balance with the bank statements; accounts receivable reconciliation to match the book balance with the aging analysis; property plant and equipment reconciliation to match with the lapsing schedule; and reconciliations of other account balances.


Monitor progress and provide feedback. Consistently track the progress of year-end tasks and provide constructive feedback to keep each employee and teams aligned with their goals. Conduct regular check-ins or status updates to identify any potential challenges and offer the necessary guidance. Acknowledge and express appreciation for the efforts exerted by employees to foster motivation and determination.


Stay updated on regulatory changes. Be proactive in understanding and adapting to any modifications to rules, regulations or reporting requirements. Keep your team informed about the latest tax-related regulations and changes. Continuously monitor official announcements from the BIR through their website at www.bir.gov.ph to stay abreast of any amendments or updates. Share this information promptly with your team and adapt strategies accordingly.


To help you establish a comprehensive calendar and checklist, here is a detailed guide outlining the deadlines for submissions set forth by the BIR for the approaching calendar year (CY) 2024:


1. Permanently bound loose-leaf books of accounts/invoices/receipts and other accounting records, CY ending Dec. 31, 2023 — deadline is Jan. 15, 2024.


2. Notarized income payee's sworn declaration of gross receipts/sales with required attachments of individuals to the payor or withholding agent, CY 2024 — deadline Jan. 15, 2024.


3. Soft copy of the computerized books of accounts and other accounting records, CY ending Dec. 31, 2023 — deadline is Jan. 30, 2024.


4. Annual inventory list, CY ending Dec. 31, 2023 — deadline is Jan. 31, 2024.


5. BIR Form 1604-C (Annual Information Return of Income Taxes Withheld on Compensation) and BIR Form 1604-F (Annual Information Return of Income Payments Subjected to Final Withholding Taxes) and Related Alphalist, CY 2023 — deadline is Jan. 31, 2024.


6. BIR Form 0605 (Annual Registration Fee for Every Head Office and/or Branch of any Business Establishment), CY 2024 — deadline is Jan. 31, 2024.


7. Notarized income payor/withholding agent's sworn declaration with list of payees not subjected to withholding tax, CY 2024 — deadline is Jan. 31, 2024.


8. BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld-For Compensation Payment With or Without Tax Withheld) to the employees, CY 2023 — deadline is Jan. 31, 2024.


9. Duplicate copy of BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld-For Compensation Payment With or Without Tax Withheld) duly signed by the employees covered by substituted filing, CY 2023 — Feb. 28, 2024.


10. BIR Form 1604-E (Annual Information Return of Creditable Income Taxes Withheld-Expanded/ Income Payments Exempt from Withholding Tax) and related alphalist, CY 2023 — March 1, 2024.


11. BIR Forms 1700, 1701 and 1701A, 1702-RT/EX/MX, (annual income tax returns) and other attachments, CY ending Dec. 31, 2023 — April 15, 2024.


12. Proof of eFiled BIR Forms 1700, 1701 and 1701A and BIR Form 1702-RT/EX/MX with audited financial statements (AFS), 1709 (if applicable) and other attachments through electronic audited financial statements (eAFS) or manually, CY 2023 — April 30, 2024.


For businesses using manual books, annual submission is not necessary. The registration of a new set of manual books of accounts shall only be at the time when the pages of the previously registered books have all been already exhausted, provided that the portions pertaining to a particular year should be properly labeled or marked by the taxpayer.


For companies with a fiscal year-end other than Dec. 31, 2023 must file the annual income tax return (ITR) by the 15th day of the fourth month after the fiscal year concludes. This deadline also pertains to the submission of required attachments for manually filed ITRs. Meanwhile, for eBIR and eFPS filers, the deadline is within 15 days from the statutory due date or the date of ITR filing/payment, whichever is later.


The conclusion of the fiscal year in the Philippines brings with it crucial considerations regarding accounting, taxes and the annualization process. This period offers a valuable opportunity for both individuals and businesses to bring their tax positions in line with regulations and optimize their financial planning.


Successful navigation through this involves meticulous planning, clear communication, vigilant monitoring and staying abreast of tax developments.


Prioritizing these guidelines enables managers to cultivate a culture of accountability, compliance and efficiency within their teams. With careful attention to these reminders and deadlines, we can facilitate a smoother and more successful tax season.


Initiating the process early, adopting a proactive stance and leveraging these reminders can set the stage for success in the upcoming tax year.

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Aileen P. Melchor is an operations manager of Paguio, Dumayas & Associates, CPAs (PrimeGlobal Philippines), an institutional member of the Association of CPAs in Public Practice (Acpapp). The opinion of the writer does not reflect in any way the opinion of these institutions.


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