Year-end working papers: what goes in the pack

What working papers are for

Working papers let a reviewer, a partner or a regulator follow every balance in the accounts back to evidence, without asking the preparer. For a small company that is not audited, they are still how the firm shows it took reasonable care, and they are what a quality review by ICAEW or ACCA looks at. A good pack answers three questions for each balance: what is the number, what proves it, and what was done about anything that did not agree.

The contents of a typical pack

1. Index, sign-off and queries

A cover with the client, the period end and who prepared and reviewed the file; an index of the sections; and a list of points raised with the client and how each was cleared.

2. The trial balance, mapped

The closing trial balance from the bookkeeping software (Xero, QuickBooks or Sage), each ledger account mapped to a code in the accounts-production chart of your accounting software (such as TaxCalc or BTCSoftware). The proof that it is complete: debits equal credits, the opening position agrees to last year's signed accounts, and the profit agrees to the movement on reserves.

3. A lead schedule for each heading

One sheet per balance-sheet heading, usually lettered (for example A for fixed assets, E for bank and cash), showing this year against last, the ledger accounts that make it up, and the reference to the evidence for each line. Common headings for a small company:

• Fixed assets: the asset register, additions with invoices, disposals, and the depreciation calculation.
• Stock and work in progress: the count or the director's valuation at the year end.
• Debtors and prepayments: the aged debtors list agreed to the ledger, after-date receipts, and a prepayments schedule.
• Bank and cash: the bank reconciliation agreed to the statement at the period end, for every account.
• Creditors and accruals: the aged creditors list, supplier statements where they exist, and the accruals for costs not yet invoiced.
• Taxes: VAT agreed to the return for the last quarter, PAYE and NIC to the payroll, and the corporation tax charge.
• Directors' loan account: every movement, and whether it is overdrawn at the year end (an overdrawn balance not repaid within nine months of the year end gives an extra corporation tax charge under section 455).
• Loans and share capital: lender statements, and share capital agreed to Companies House.

4. Profit and loss review

Each income and cost line against last year, with an explanation for any large or unexpected movement, and checks on the ledger itself: duplicate payments, round sums, entries outside the period and personal spending through the company.

5. Journals and the final trial balance

Every adjustment the firm made (accruals, prepayments, depreciation, corrections), each with its reason, the final trial balance after them, and the same journals ready to post back to the client's ledger so next year opens in balance.

Where the hours go

Most of the time on a small file is not judgement. It is mapping ledger codes, typing balances into lead schedules, finding the statement that supports each one, and checking that everything casts and cross-references. The judgement calls (a provision, a valuation, whether an entry is personal) are a small part of the file, and they are the part a qualified person should spend their time on.

How PaperHQ prepares it

PaperHQ reads the bookkeeping export and the client's documents and prepares the pack above in your firm's own Excel template: the trial balance mapped and proven, each balance tied to its evidence, one list of exceptions, and the opening balances journal for the books. Numbers are calculated in code; an AI model only helps with reading and wording, on masked data. Your team reviews the exceptions and signs. See how it compares with platforms and outsourcing.