We all understand and dread the paperwork and effort that goes into preparing our end of year financials. Diligence and detail is obviously vital in ensuring you maximise your returns and benefits and that you are then ready to launch into the new year with a positive and pro-active mindset.
Maintaining accurate financial records throughout the year is the most positive way to ensure that you are not burdened with an overload of bookwork come June 30. However, if you are feeling the pinch, Ian Jones, PaySmart CEO, has identified some key areas to keep in mind as June fast approaches.
1. Make superannuation payments early: Businesses can claim a deduction for superannuation that is paid before the end of the financial year. Even if quarterly superannuation payments aren’t due until July, you can take advantage of deductions in this tax year if you pay them early.
2. Get rid of obsolete equipment: Check your asset register and scrap any obsolete equipment. You can take advantage of a write-off deduction for scrapped equipment as long as you write-off the equipment before the end of the financial year.
3. Write off bad debt: Have a look at your outstanding invoices; do some date back as far as the previous tax year? It’s time to physically write it off in the books, this way you can claim back the GST credits on that debt.
4. Conduct a stock take: Take an inventory of your stock to identify slow moving and unsaleable stock, these should also be written off before 30 June.
5. Reconcile your bank accounts: If you’re using an online accounting solution, you’re enjoying the benefits of having your bank transactions fed directly into your data file and auto-coded – a significant time saver. If not, reconcile your bank accounts after receiving the final bank statement of the financial year to ensure your records match the record of your bank(s).
6. Provide information to your accountant or bookkeeper: Provide all necessary financial information to your accountant or bookkeeper. There are several options; for example, have them make a point-in-time copy from your data file in the cloud or provide them with a secure copy of your backed up files. Check what best suits them.
7. Final end of year adjustments: Your accountant or bookkeeper may want to make a number of adjustments to your reports or accounts. Once changes have been updated, lock all accounts relating to that year so that data remains accurate. This will help ensure an easy transition into the new financial year.
8. Reconcile your business plan with your final accounts: Have you met or exceeded financial expectations? If not, why? Once you have answered these questions you can then adjust your systems and processes to ensure that any holes in your financial management assets can be rectified for the new year.
9. Review your accounting/business management software: It’s a great idea to take the time to ensure that your software is performing as it should. Is your cash flow where you want it? If not how can you maximise this through increased functionality or know how? Understand your business systems, review them in line with your financials and if required, make changes for the new year.
10. Prepare for the new financial year: The end of financial year shouldn’t be all reports and numbers. It’s also a good time to reassess and tweak your marketing plan and ensure you’re on the right path for next financial year.
