Are you ready for end of financial year?
It seems not so long ago that we were opening presents from Santa and enjoying weekends at the beach. All of a sudden the days have turned cold and I’m rifling through my kids drawers trying to find them warm clothes for the day. And just around the corner is End of Financial Year! Well, that snuck up rather quickly – a little too quickly, if you ask me. If you’re thinking the same thing, here are some tips to get you prepared and through it.
Gather your information
Whether you have a “shoebox” full of receipts, nicely colour-coded folders or an organised electronic accounting system, there is still some information that you’ll need to gather and have prepared for your accountant for end of financial year. This includes:
- Sales information – details of your sales and customer receipts
- Purchases information – details of your purchases and supplier receipts
- Payroll information – details of amounts paid and withheld, as well as copies of Payment Summaries
- Other information – copies of supplier invoices for capital equipment purchased and sold, list of outstanding debtors and creditors (accounts receivable and payable), log book or other record of vehicle expenses, 30th June stocktake.
Review and reconcile your information
It’s important that the information you’re sending to your accountant is complete and accurate. Review and reconcile the following information prior to submitting for end of financial year:
- Ensure all of your bank and credit card accounts have been reconciled. Review any “unreconciled” transactions and see if any adjustments need to be made.
- Reconcile your “clearing” accounts. These are also known as “control” accounts. In an electronic system such as MYOB these accounts will include Suspense Account, Undeposited Funds, Electronic Clearing, Cash Drawer, GST liability accounts, payroll liability accounts, etc. It’s easy for things to slip into these accounts accidentally and then get lost.
- Record (if you haven’t already) and reconcile petty cash.
- Review BAS & IAS submitted against what your records show they should have been. Does an adjustment need to be brought into the June BAS?
- Review your wages information and ensure they reconcile with your Profit & Loss.
- Review your superannuation and ensure you’re accrued the correct amounts, and paid the correct amounts to the superannuation funds.
- Review your employee’s entitlements and ensure they’re correct, and make a provision for the monetary value on the Balance Sheet (or advise your accountant that you’d like to see this liability on the Balance Sheet and they’ll make the adjustment for you).
- Review debtors (accounts receivable) and see if any invoices need to be written off as bad debts. Also clear out any little anomalies like invoices short-paid by a few cents. Are there any outstanding credit notes that should either be reversed or applied to outstanding invoices? Ensure the total amount of your outstanding debtors equals the amount on your Balance Sheet.
- Review creditors (accounts payable) and see if anything needs to be reversed or paid prior to the end of the financial year. Are there any outstanding credit notes that should either be reversed or applied to outstanding purchases? Ensure the total amount of your outstanding creditors equals the amount on your Balance Sheet.
- Do a stocktake at 30th June.
Organise your end of financial year information
If you use an electronic system such as MYOB or Xero, your accountant will love you and you should provide this information to your accountant. Other things to give to your accountant include:
- Outstanding debtors at 30th June.
- Outstanding creditors at 30th June.
- Employee PAYG Payment Summaries.
- Stocktake at 30th June.
- Bank and credit card statements at 30th June.
- Vehicle log book (if applicable).
- Invoices for any capital equipment purchased throughout the year, and details of any capital items sold during the year.
- Documentation for any new finance agreements taken out in the year.
- Details of any work in progress.
- Details of any prepaid expenses – e.g. 12 months insurance premium paid in April.
- Details of any overseas stock in transit – ordered before 30th June.
- Details of any shares purchases or sold and dividends received during the year.
And finally regarding end of financial year …
Ensure that when you’re providing electronic data to your accountant, they know which software version you’re using, and any username and password they need to access the file. Also ensure that you’ve done a backup and locked down to 1st July so that nothing else can get entered into that financial year.
If you’ve done the “shoebox thing” this year and think it’s all just too hard, we’d be very happy to discuss the best electronic solution for your business – once you get it set up and working for you, you’ll wonder why you waited so long to get started!
If you’d like help with your end of financial year, please contact us and we’ll help you through it!