Each year, 30 June can be a stressful time if you are running your own business. The end of the financial year can bring an “oh no” moment as you realise that the bookkeeping, accounting records, invoices, and tax receipts that you have collected over the course of the year need to be put into order and prepared so you can do your year-end reporting.
To help make life simpler, we’ve put together a checklist for what you need to do to get your books and administration in the right shape for their end of year workout.
- Profit and Loss
The profit and loss statement is the most easily identifiable “output” that you need to have at the end of the financial year. It tells you (and your bookkeeper and accountant) how much profit you’ve made after a year of hard work. If you are not using online accounting software, then you should consider it: being on top of this sort of thing throughout the year means that preparing your P&L before June 30 can be as simple as just pressing one button. Efficiency Partners are Xero Certified Bookkeepers and qualified with a range of other online accounting providers to help you with this.
- Stock Take
If you sell physical goods, then a stocktake is something you need to do so you can claim the appropriate deductions for the year. Tax deductions are only permitted for the financial year in which the expense (the cost) was incurred. That means that you are better off doing your stocktake as close to the end of the financial year as possible. Plan your calendar now to make sure you can get your stocktake started and finished on time.
- Buying New Equipment
If you want to purchase an asset but you’re not sure when the best time of year is to do so, June is a good time as the government has extended its small business instant asset write off (instant deduction of purchases up to $30,000). That means for any equipment you purchase in June, you can claim it almost immediately in your next tax return.
- Employer Obligations
All employees must receive their payment summaries (previously called group certificates) by the 14th of July. You must then submit your Payment Summary to the ATO by the 14th of August. The introduction of single touch payroll (STP) will change this in the future, but not all businesses have migrated to this system yet. As always, all superannuation required to be paid should also be reconciled at the end of the month. I would recommend going through the process of ensuring all employees personal details including TFN are on file.
- Review Insurance
The end of the financial year is also a good time to review any business insurance you have. Insurance providers are very keen to keep your business, so a short phone call around this time of year asking for a discount before you renew can pay big dividends when it comes to annual savings.
- Bad Debts
The end of the financial year is a great time to write off any bad debts. You do not want to be paying tax on the money you will never receive. Go through your Accounts Receivable (trade debtor) and review all monies outstanding to ensure the money is recoverable. If it’s not, write it off as a bad debt.
Of course, we can help to greatly lessen the burden of end of financial year administration and reporting as we have been helping businesses with our friendly, efficient bookkeeping services for many years now. Just give our friendly team a call today to find out how we can help you at this end of the financial year.