Working Papers

This help article goes through some best practice guidance and useful tips for the working papers section of a year end accounts file.

File Notes

All reconciliations included here are really important and should almost always be completed unless there is a specific reason not to eg client is manual records there profit rec N/a.

Taxation/Corporation Tax

All reconciliations should be completed here unless N/a such as Summary of R&D expenses.

Disclosure

Please ensure that all disclosure templates remain starred to note that you have considered it.

Review

A full nominal activity from the bookkeeping system should always be attached here in either excel or pdf. This is important as it is back up to the figures for the year should anything happen to the sync/file.

Client Meeting / Approval

Client meeting notes should be attached in Key Documents. This is very useful as it means that they will then automatically pull through to next years planning section and helps document our discussions with the client.

Balance Sheet

It is best practice for all balance sheet items to be reconciled with appropriate back up.

Noted below are templates with specific best practice examples.

Section	Best Practice
Fixed Assets	The individual fixed asset nominal codes can be left un-starred as they are all reconciled through the fixed asset registers, no work is needed within the nominal code.
Prepayments & Accrued Income Accrual & Deferred Income	The detailed template should be used, and amounts should be calculated in days (not months). All accounts should be taken in via the # function. This will give you the movement journal for the year.
VAT	VAT closing balance reconciliation should be completed for all VAT registered clients. VAT turnover reconciliation should be completed until the difference is below 1% of the turnover. The VAT nominal code does not need to be reconciled as this is done within the VAT closing balance reconciliation.
Payroll	Always reconcile the balance sheet payroll codes first with appropriate back up. Should the Payroll P&L/BS reconciliations be completed? The payroll reconciliations are not required on every file. This is on a client by client basis and a discussion should take place with the manager at planning stage. But you should take into account the materiality of the wages figure to the accounts as a whole and also the movement on the prior year to help you decide. If populating the Payroll P&L reconciliation this should be completed until the difference is below 1% of the total wage costs.
Hire Purchase	Interest method should be Sum of digits Start date of interest payments should be left as default date as interest begins accruing from date of purchase Once info has been populated scroll down to bottom and ensure balance comes to Nil.
Directors Loan Account	Should use the "DLA with transaction detail" template Transaction should be included on a line by line basis and not summarised as it is important to track the balance throughout the year to ensure it does not become overdrawn at any point.

Profit and Loss

It is best practice to prepare reconciliations for accounts with unusual movements, large amounts, tax sensitive codes (such as professional fees, sundry and repairs) etc. There is no requirement to prepare a reconciliation for all P&L nominals unless specifically requested otherwise.

Section	Best Practice
P&L reconciliations	You should avoid just doing an import of the nominal ledger into the reconciliation as this does not add any value to the file (the same info can be viewed by clicking "View Ledger"). You should summarise where appropriate and detail any journal adjustments that have been done, adding invoices where appropriate.
Tax sensitive nominals (eg professional fees, sundry and repairs)	Ensure you are using the disallowed templates schedule. This will pull through all your disallowed items to the "Summary of Disallowed Items". This should then agree to your tax comp (before capital allowances).
Rural files only	Ensure you use the Agricultural - P&L Stock Quantities" for the livestock sales and purchases nominals. This will then pull through to the Livestock Reconciliation.

NOTE: If there is anything in this help article that needs updated please get in touch with the Silverfin Experts.