With the end of financial year fast approaching on June 30, many of us begin creating checklists of tasks to complete. However, some people may feel unsure about what should be on that list and where to begin.
There’s no denying that there’s a lot to do, including checking bank statements, clearing accounts, managing payroll, reporting, conducting stocktake, and handling outstanding bills and invoices. If the thought of tackling any of these tasks overwhelms you, don’t worry! We’re here to provide assistance.
In this blog post, we will outline 10 essential tasks to complete before the end of the financial year. This list will provide you with a starting point and serve as a foundation for getting yourself organised.
As Dale Carnegie famously said, “An hour of planning can save you 10 hours of doing.”
1. Review Your Bank Statements
Regardless of the size of your business, the first task you should undertake is to reconcile your bank accounts with your bank statements. This simple activity helps ensure that the bank balance in your financial software matches your actual bank statement accurately. It’s important to perform this task regularly, not just during tax time. Make sure that your business operating accounts, savings accounts, loans, and credit card accounts all match up to their respective statements and balance sheets. If you notice any discrepancies, investigate and rectify them promptly.
2. Review Clearing Account Balances
If you use integrated payment gateways or point-of-sale software like Square or Pinch Payments, you likely have “clearing accounts” that are linked to your financial software. Since transactions frequently flow in and out of these accounts, the balance of any clearing account should always return to $0.00.
By June 30, unless there are known delays in fund clearing, the balance of these accounts should be zero. If it isn’t, take the time to identify the reason behind the imbalance. Sometimes, issues arise when the payment gateway doesn’t integrate correctly with your financial software. If you encounter this problem, it’s advisable to seek professional assistance like the team at Gecko Cloud Solutions.
3. Review Outstanding Debtors
In business, cash is king, so if you have any outstanding invoices, it’s time to follow up on them and ensure you receive the payments. Review your list of debtors and assess whether you’re likely to collect the outstanding amounts or not. If you know that you won’t be able to collect the money due to bankruptcy or inability to contact the debtor, finalise these outstanding invoices by classifying them as bad debts or creating credit notes.
Chasing invoices can be a hassle, but there are measures you can take to simplify the process, such as setting up automatic payment reminders or providing convenient payment options for customers.
4. Review Outstanding Creditors and Business Expenses
Do you have any unpaid bills that need attention? If your cash flow permits, making payments for business expenses before the end of the financial year can reduce your taxable income. Take a closer look at your list of creditors, as you may discover duplicate entries, unallocated credits, or disputed bills that you may have forgotten about. If you identify any of these issues, take appropriate action by allocating the credits, creating new entries for unpaid bills, or eliminating duplicates.
Also, ensure that you have accounted for all your business expenses. Enter all cash transactions or purchases made from the wrong accounts (such as personal credit cards) into your financial software. This ensures that the expenses and any applicable Goods and Services Tax (GST) are claimed in the current financial year.
While reviewing your business expenses, consider whether there are any areas where spending has been unusually high. Can you negotiate better rates with suppliers or explore alternative options to save money? It’s always worth asking, as it can improve your bottom line.
5. TPAR – Taxable Payments Annual Report
If your business requires the completion of a taxable payments annual report (TPAR), now is the time to start preparing for it. Take a moment to ensure that all the information in your system is complete and accurate. This will save you a significant amount of time in the future.
Double-check the details of your contractors, including their business name, Australian Business Number (ABN), Goods and Services Tax (GST) status, business address, email address, and phone number.
Next, make sure that all transactions involving contractors are properly reported. Depending on the software you use, you may need to designate these transactions as reportable. Verifying these details now will save time when preparing your TPAR.
Not sure if you need to lodge a TPAR? Check here.
6. Complete a Stocktake
Whether you run an eCommerce/retail store, a sporting club, a café, or work as a tradie with inventory, conducting a stocktake before the end of the financial year is crucial. Performing a stock count not only ensures the accuracy of your records but also helps identify slow-moving or damaged stock, reveals potential theft or inefficient processes, and prevents overstocking.
With these considerations in mind, make sure to schedule a stocktake before June 30th.
7. Organise Your Paperwork
“Good order is the foundation of all things” – Edmund Burke
Maintaining organisation is essential and frees up time for other profit-generating tasks. Utilising financial software and digital applications is one of the easiest ways to keep your receipts, tax invoices, and other relevant documents in order. Apps like Dext or Burdi are excellent tools for this purpose. Alternatively, create a dedicated folder on your computer and develop the habit of digitally storing your paperwork. In this folder, you can store motor vehicle tax invoices, finance documents, insurance documents, payroll documents, and more.
Take action now if you haven’t already done so. It saves a lot of time and unnecessary stress down the line.
8. Review Your Payroll Reports
This task carries significant importance. Before the end of the year, set aside time to review your payroll reports. Begin by checking your payroll clearing or wages payable account. The balance in this account should be $0.00, indicating that you have cleared your employees’ net pay correctly. If you find a balance in either of these accounts, investigate whether you missed paying a staff member or if the payroll transaction was coded incorrectly. A common error is coding wages paid to the wages and salaries expense account.
Next on the list is Superannuation Payable. Does the balance in this account match the figure in the superannuation expense account for the quarter? If it doesn’t, have you missed a payment from a previous period or has a payment been returned from a super fund? In either case, these payments will need to be processed before the end of the year.
It’s also crucial to note that, for employers who want to claim a deduction in this financial year, Super Guarantee contributions must be received by the superannuation funds by June 30. The deadline for payments may vary depending on the software and specific fund, so ensure you’re aware of these deadlines before the end of June.
9. Consult Your Accountant for Tax Planning
Now is the time to schedule an appointment with your accountant to discuss tax planning. Regardless of whether your business is thriving or struggling to make a profit, your accountant can provide valuable insights. They can assist in making decisions regarding significant asset purchases, potential investment opportunities, and superannuation. Planning these details now can potentially save you money on taxes and guide your business decisions in the new financial year.
10. Stay Updated with Software and Compliance Changes
Last but not least, let’s address changes in software and compliance requirements. How will the increases in superannuation contributions and potential minimum wage rates affect your cash flow? Is your software configured correctly to accommodate these changes and comply with the updated STP Phase 2 reporting requirements?
Key Changes coming to 23-24 financial year:
- The Super Guarantee will increase to 11%
- The National Minimum Wage will be increased from $21.38 to $23.23
- Award rates will be increased by 5.75% – 15% so check your modern award.
- E-Invoicing will be the new terminology over the next year.
In conclusion, as the end of the financial year approaches, it’s essential to take proactive steps to ensure your business is organised and prepared. By following the ten key tasks outlined in this blog, you can streamline your financial processes, optimise tax planning, and maintain compliance with regulatory changes.
Reviewing bank statements, clearing account balances, chasing outstanding debtors, and managing outstanding creditors are all critical for maintaining healthy cash flow and accurate financial records. Completing a stocktake helps identify inefficiencies and potential issues with inventory management. Organising your paperwork and staying on top of payroll reports ensures accurate record-keeping and compliance with superannuation obligations.
Seeking advice from your accountant for tax planning empowers you to make informed decisions that can benefit your business financially. Additionally, staying updated with software and compliance changes, helps you avoid penalties and ensures smooth operations.
By implementing these tasks, you’ll not only navigate the end of the financial year smoothly but also set a strong foundation for the upcoming year. Remember, proper planning and organisation can save you time, reduce stress, and potentially result in financial savings.
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