Financial Compliance Checklist for Companies

A proper financial compliance checklist for companies is useful to businesses in managing taxes, accounts, filings, and reports. Companies need to ensure that they have their accounts, returns, payments, and requirements checked. My Startup Solution will be able to assist you in organizing your requirements and maintaining proper compliance documents.

What Is a Financial Compliance Checklist for Companies?

A financial compliance checklist is an easy-to-use list of financial, tax, and legal compliances that need to be followed by the company. Some of the compliances that can be in this list are accounting documents, income tax, GST, TDS, yearly filings, audits, and company-specific filings.

Financial Compliance Checklist for Companies

The following checklist may help a company ensure that all its significant financial and regulatory commitments are in order. Certain commitments are required on a monthly or quarterly basis, while other commitments need to be met annually. This list needs to be revised when there are any changes in the business activities of the company.

Accounting and Financial Records

Good accounting records serve as the foundation for financial compliance in companies. Financial data of the company should always be up-to-date and properly documented.

• Record sales, purchases, expenses and receipts.
• Record books and reconcile bank accounts.
• Secure invoices, bills, and receipts of payments.
• Check overdue receivables and payables.

Income Tax Compliance

Income tax compliance entails that businesses ensure their taxable income is properly reported and that all related tax payment obligations and filing obligations have been met.

• Calculate and make payments of advance tax where applicable.
• Filing of the company's income tax return.
• Checking of allowable deductions and tax credits.
• Maintenance of supporting tax records.

Annual Return Filing

Annual return filing is an essential compliance activity for companies. Forms and filings to be completed depend on the nature and status of the company. ROC compliance should be recorded in addition to filing of financial statements.

• Complete the annual return form.
• File the relevant financial statements with the Registrar.
• Ensure the correctness of the information on the company and directors prior to filing.
• Keep records of the receipts of filings and filed forms. AOC-4 pertains to financial statements and MGT-7/MGT-7A pertains to annual returns.

Companies Act 2013 Compliance

The Companies Act 2013 compliance deals with many duties to be performed by the company throughout the year. Complete MCA compliance deals with maintaining records and filing documents.

• Maintain statutory registers and company records.
• Conduct required Board and shareholder meetings.
• Keep a record of changes in directors and other company details.
• File applicable forms and resolutions with the MCA.

GST Compliance

GST compliances are very important for the businesses that are GST registered and making taxable supplies. Companies should align their GST record keeping with bookkeeping and invoices before filing their GST returns.

• Filing of appropriate GST returns.
• Alignment of sales with GST record keeping.
• Verification of input tax credit details.
• Proper invoicing and other GST documentation.

TDS Compliance

TDS compliance is required in cases where the company pays certain amounts on which tax deduction is needed. The company needs to verify the requirements regarding tax deduction, depositing and filing for each particular transaction.

• Deduct tax under TDS at the appropriate rates.
• Make deposits of TDS within the stipulated period.
• File appropriate TDS forms.
• Issue TDS certificates as per requirement.

Audit and Financial Review

Statutory audit will assist relevant companies in conducting reviews of their financial statements and accounting records. Conducting a regular financial review will also assist in detecting mistakes before they turn into compliance issues.

• Prepare financial statements and schedules.
• Provide necessary records to the auditor.
• Review mistakes and audit observations.
• Meet audit and reporting requirements.

Other Compliance Checks Companies Should Track

Businesses may also need to comply with further conditions based on what they do, their people, where they are located, or in which industry they belong.

• PF & ESI conditions, as applicable.
• Professional Tax conditions, as applicable.
• Registrations / Filings regarding labour.
• Industry-specific licenses/filings.

Monthly Financial Compliance Checklist for Companies

Monthly checklist for financial compliance of companies allows businesses to stay away from late-night rushes and mistakes.

• Transaction recording and reconciliation to be done every month.
• GST and TDS compliance checklist to be reviewed.
• Tax payment status to be checked.
• Payroll and accounting record updating.
• Outstanding compliance deadlines should be checked.

Annual Financial Compliance Checklist for Companies

The following is an annual financial compliance checklist for companies that consolidate key end-of-year requirements.

• Close your accounting books.
• Prepare your annual financial statements.
• Conduct your audits.
• Submit your annual taxes and corporate returns.
• Maintain documentation of submission.

Documents to Keep Ready for Financial Compliance

Proper documentation will ease compliance efforts and help support the information contained in the return or financial statement.

• Sales and purchase invoices
• Bank statements
• Expense records
• Tax challans and returns
• Payroll records
• Financial statements
• Audit and filing documents

How to Ensure Financial Compliance in a Company?

Financial Compliance can be made easier for businesses if they follow a consistent process rather than depending on deadlines for filing. Tax and financial compliance checklist will assist in making the responsibility clear about the work that is pending.

• A compliance calendar must be maintained.
• Create alerts for recurring deadlines.
• Match your accounts before filing returns.
• Make sure that your records are organized.
• Take the help of experts for complicated requirements.

Common Financial Compliance Mistakes to Avoid

These small errors may cause a delay, notice, interest or penalty. Regular review may assist businesses to avoid avoidable compliance issues.

• Failure to file and pay before the deadline.
• Reporting figures that don’t tally with accounting records.
• Not doing reconciliation of GST/TDS entries.
• Using incomplete documents for support.
• Failure to consider changes in relevant rules.
• Filing the return without reviewing the details.