How Ready Are You for the End of Financial Year?
The end is nigh, as the saying goes. Or the end of the financial year anyway – which makes it a good time to review your accounts and make sure you’re well-prepared.
This is very important, because there’s not much worse than getting to the end of financial year (EOFY) and scrambling to get your books up-to-date. It’s not only highly stressful, but all that rushing could lead to costly mistakes. And who needs that?
So, with EOFY fast approaching, here are some of the things you need to make sure you’re on top of.
8 things to get ready for EOFY
- Sales and expenses – by now all your sales and business expenses should be entered into your system with correct GST allocations. Payments received from debtors and/or made to creditors should also be recorded. Once this is up-to-date, you should be able to easily generate a list of outstanding debtors and creditors at EOFY.
- Payroll / super – your payroll should be all entered and reported to the tax office (through Single Touch Payroll) and the correct super paid to each employee’s fund.
- Banking – all your bank accounts, credit cards and loans should be reconciled to their corresponding statements.
- Stock take – it’s no good to be doing your stock-take a couple of weeks after June 30. You need to have a record of stock-on-hand as close to the end of year as possible, so you have accurate opening and closing trading stock values on your financial reports.
- Asset register – an up-to-date register and record of assets acquired or disposed of during the year is important for depreciation calculations and potential CGT (capital gains tax).
- Trust accounts – there are some very strict rules about trust accounts, which includes prompt entry of transactions, maintenance of individual ledgers for each client, and three-way reconciliations. So this is definitely not something to leave until end of year!
- ATO lodgements – your lodgement obligations (e.g. BAS, PAYG, FBT and TPAR) should be up to scratch, and reconciled with corresponding accounts in your ledgers.
- Clearing and / or suspense accounts – these accounts should only ever hold temporary balances, which means they should be cleared to zero balance by EOFY. If not, you should at least be able to explain any balances they are showing there.
With everything updated you should be able to generate accurate financial reports such as profit and loss, balance sheet and cash flow. You must also be able to explain any substantial discrepancies between budget and actual figures for the year.
EOFY can also be a good time to review your accounts and set budgets for the year ahead, and to look at your insurance policies and marketing plans.
That way you can start the new financial year with a fresh outlook!
Save time and stress with a trusted business bookkeeping partner!
Trying to do it all yourself can lead to costly mistakes – especially with all the complexities around taxation and compliance. But when you partner with a professional accounts management service, you can relax knowing your accounts are being taken care of, which means you get more time to spend focusing on your own services and clients.
To find out more about our year-round tailored accounts management and payroll services for Australian businesses, give us a call or send an online message.