How to Prepare for the End of the Financial Year
Most small business owners are familiar with the rising panic as June looms closer, bringing with it images of piles of paperwork, missing receipts and stress over numbers that don’t add up. It doesn’t have to be this way however, there are plenty of habits and systems you can implement now to avoid the uncertainty and pressure associated with the end of financial year and tax return filing.
1. Prepay your expenses
If you have work-related expenses that can be paid for prior to June 30th, do so, as this will help with your tax deductions. This could be a subscription that needs renewing, new office equipment that needs purchasing or stocking up on materials for your product.
2. Control your stock
Undergo a stocktake to get a true stock value and determine your cost of goods sold. Unused inventory needs to be declared as an asset, so you may need to consider writing off obsolete stock if necessary, so it doesn’t affect your bottom line. There are many inventory apps that integrate with online accounting software, this can help to quickly and easily see and manage stock levels year-round.
3. Keep accurate records
Maintaining accurate records year-round will be invaluable in making it simple and pain-free to prepare your end of financial year paperwork. Speak to your accountant about the best system for your business.
4. Reconcile your bank accounts
If you’re using online accounting software such as Xero or MYOB, you may already be reconciling your bank feeds daily or weekly. If not, you will need to review your bank account statements against your business records. Meticulously compare every transaction from your bank account to what you have in your own records, if there are any discrepancies make sure you deal with them right away.
5. Implement accounting software
If you’re not already using accounting software, it could be time to look at implementing it now. Online accounting platforms are invaluable in producing PAYG, GST and BAS reports, as well as payment summaries and taxable payments reporting.
6. Implement workforce management software
Something else to consider if you are looking to automate your systems for smoother record-keeping is time and attendance software. Employee wages are a big part of your business’s tax filing and without automation, it’s likely you are wasting significant time calculating and reconciling time cards and manually entering data. Payroll mistakes can cost businesses a lot of money and can potentially get them into a lot of trouble too. Your timesheet, payroll and accounting systems should all be integrated to provide an end-to-end business solution for accurate reporting and a simple, stress-free tax end of financial year.
7. Complete your tax paperwork
There are a number of documents required by the ATO at the end of financial year, but the two most important are your profit and loss statement and balance sheet, which the government use to assess your business’s tax obligations.
8. Consult your accountant
It’s a good idea to speak with your account in the months leading up to the end of financial year. They will be able to give you an idea of where your business is sitting financially and help you with tax planning. This is also a great time to get their advice on any other tasks you should be completing at this time, including stock take.
The habits that you form in your business now can play a significant part in reducing the strain when end of financial year comes around. If you’re using reliable automated systems to monitor, record and report on key information, you will have everything at your fingertips on June 30th. Contact the Aussie Time Sheets team today to discuss the best time and attendance system for your small business.
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