As we get closer to EOFY is it timely to start getting your business ready. Finalising your business accounts for the end of the financial year is more than just making sure everything reconciles! In addition to ensuring that your business meets its financial obligations and comply with tax laws, it also helps you make informed decisions about your business going forward.
To help your business with this process, we have put together a list of key elements that you need to consider, especially when you are preparing to meet with your accountant.
Trading Stock
- Conduct a stocktake to determine the value of your trading stock at the end of the financial year.
- Write off any obsolete or damaged stock.
Bad Debts
- Review your accounts receivable and identify any debts that are unlikely to be paid.
- Write off any bad debts as an expense.
Employee Wages & Leave
- Ensure all employee wages have been correctly calculated and paid.
- Check all annual leave and other types of leave balances to ensure they have been recorded accurately.
Interest Payments
- Review all loan and credit card statements to ensure that the interest has been correctly calculated.
- Make sure all interest payments are recorded accurately in your accounting system.
Higher Income
- Review your income statement and identify any unusually high income items.
- Make sure that all income has been accurately recorded and that any tax obligations have been met.
Fixed Assets
- Review your fixed asset register to ensure that all assets have been recorded accurately.
- Consider whether any assets need to be written off or disposed of.
Shareholder Loans & Current Accounts
- Review all shareholder loans and current accounts to ensure that they are accurately recorded and reconciled.
- Make sure that any transactions between the company and shareholders have been properly recorded and supported by documentation.
Imputation Credits
- Calculate your imputation credit balance and ensure that it is up to date. You may need help from your accountant to do this!
- Use this balance to determine the amount of imputation credits that can be attached to dividends paid to shareholders. If the imputation credit balance is insufficient, the company may need to pay additional tax to ensure that it has enough credits to attach to dividends. Check this with your accountant.
Don’t leave this work until the last minute! Working closely with your accountant will mean that getting organised for EOFY will go smoothly for you and your business. We provide a checklist to all of our clients at this time of year to help step them through the process and ensure that nothing is missed.
Talk to us today if you would like to be better prepared and ensure that EOFY lands exactly where you want it to!
