29 Jun Getting Ready for the End of Financial Year
The end of the financial year is a busy time for everyone. While we recommend that tasks necessary to prepare your financial statements are performed regularly in order to provide you with critical information to understand how your business is performing and to showcase possible areas for improvement, there are a number of tasks that must be undertaken at year-end. As the 30 June deadline approaches, all business owners will benefit from constructing an end of financial year checklist.
- Schedule an appointment with your bookkeeper to review your finances, including the setting of performance targets for the coming year
- Gather together all financial documentation required for the preparation and lodgement of your income tax return
- Review your profit and loss statement and balance sheet
- Reconcile accounts
- Prepare for lodgement of your June or annual Business Activity Statement (BAS)
- Conduct a stocktake
- Prepare payment summaries
- Review assets bought and sold within the financial year
- Review your insurance policies
- Reconcile accounts receivable/payable and ensure accounts are up to date
- Establish and account for any liabilities owing
- Reconcile superannuation and ensure that you are meeting your Super stream obligations. If you want a deduction for your superannuation contributions for the year, ensure they are paid in full before 30 June, including the June 2017 quarter liability
- Ensure all documentation for employees is complete and up to date e.g. TFN Declarations, Fair Work Information Statements, Super Choice forms, Employment contracts, training registers etc.
- Keep up to date with tax changes starting next financial year
- Update your financial software / start a new financial year – take a copy of the file and store in a ‘years’ folder for easy access / Roll over the file Government grants: If you receive any government grants, take the necessary steps to ensure that you are meeting mandatory requirements for receipt of those grants
Checklists will not be the same for all businesses. Speak to your bookkeeper today to establish an end of financial year checklist tailored to you.
Another important aspect of preparing for the end of financial year is to be able to explain any transactions. It is in your best interests to keep good records in writing, whether in electronic form or on paper.
Good record keeping helps you to understand your current business situation at any point.
Electronic storage does have some benefits over paper copies. Not only are you able to store more data in a minimal amount of space, but sorting, invoicing and ready-made reports are far easier to produce.
In the event of a fire or flood, your documents will still be intact, and using the right software can help you keep up with the latest laws, and report essential information to the government online. Ask us which system (hyperlink – choosing right accounting software) is best for your business, so we can help you operate efficiently.
Always ensure you keep tax records for a minimum of 5 years and business records for 7 years.
Review what tax deductions you can claim
The end of the financial year is an excellent time to meet with your accountant or bookkeeper to assess exactly what tax deductions you are able to claim for your business.
Key things to consider include:
- Does the business have motor vehicle expenses?
- Does the business use diesel fuel?
- Are you based at home?
- Do you have travel expenses that require log books to be maintained?
- Can you prepay expenses and claim a deduction this year?
- Does the business use machinery, tools or computers?
- Have you set up a website?