The Most Common Year-End Accounting Mistakes

As the end of the year rolls around, most business owners are juggling holiday deadlines, last-minute jobs, and planning for January. With all that going on, it’s easy for the financial side of things to slip, and the same mistakes crop up year after year.

With a little awareness and a bit of organisation, these mistakes are completely avoidable. Here are the most common ones we see and how to make sure you don’t fall into the same traps.

1. Leaving Bookkeeping Until the Last Minute

It’s tempting to think you’ll “catch up in January”, but late, rushed bookkeeping often leads to missing receipts, duplicated transactions, and inaccurate figures.

Avoid it by:

• Setting aside one hour each week to your books.

• Matching bank transactions as you go.

• Using software like Xero to automate as much as possible.

A tidy set of books now saves a lot of pain later.

2. Forgetting to Claim Allowable Expenses

We regularly see business owners pay more tax simply because they didn’t know what they could claim.

Commonly missed expenses include:

• Mileage or business travel

• Home office costs

• Software subscriptions

• Training and development

• Mobile phone use (proportionately)
  

Avoid it by:

• Keeping digital copies of receipts

• Reviewing your expense categories

• Asking your accountant if you’re unsure, it’s always worth checking

3. Not Reconciling Your Bank Accounts

Your accounting software and your bank balance should match. If they don’t, something’s wrong, and it can snowball into bigger issues if ignored.

Avoid it by:

• Reconciling monthly (or weekly if possible)

• Checking for duplicate invoices, missing payments, or miscategorised transactions

• Making sure all payment platforms (Stripe, PayPal, SumUp) are also reconciled

4. Misunderstanding VAT Deadlines and Rules

Year-end is often when VAT mistakes become obvious. The most common issues include entering the wrong VAT rate, forgetting to claim VAT on expenses, or missing a submission deadline.

Avoid it by:

• Reviewing VAT rates regularly

• Running a quick VAT return check before filing

• Setting calendar reminders for deadlines

• Making sure your bookkeeping software is set to the correct scheme (standard, cash, flat rate)

5. Poor Stock or Inventory Tracking

For businesses that hold stock, inaccurate counts lead to incorrect profit figures and sometimes a bigger tax bill than necessary.

Avoid it by:

• Doing a proper stock take before year-end

• Recording any damaged, lost, or obsolete stock

• Using inventory software if you carry a lot of items

6. Forgetting About Directors’ Loan Accounts

This one catches many limited company owners out. If you’ve taken more money out of the business than you should have, your directors’ loan account might be overdrawn, and that can trigger extra tax.

Avoid it by:

• Checking your loan account regularly and not at the last minute

• Running a year-end forecast

• Talking to an accountant about the best way to clear or reduce any balance

7. Not Planning for the Tax You’ll Owe

Tax bills shouldn’t be surprises, but they often are. Many business owners underestimate their January payments or forget about payments on account.

Avoid it by:

• Setting aside tax monthly

• Asking your accountant for an estimate before year-end

• Reviewing whether your income level means payments on account will rise or fall

8. Not Asking for Help Early Enough

The biggest mistake…waiting until something becomes a problem before asking for support.

Year-end should feel manageable, not stressful. If you’re unsure how to prepare, what you can claim, or whether your accounts are accurate, that’s exactly what we’re here for.

Need help getting organised before year-end?

We keep things simple and straightforward. Whether you need help tidying up your books or want a year-end review to make sure everything is in order, we’re here to make the process easy and stress-free. Just get in touch, and we’ll be here to help.