The end of the financial year is emotional wellness-damaging time for managers, and their loved ones, but does it always have to be that way? Day-to-day operations are already demanding enough for business owners, so it’s tempting to leave the dull stuff until crunch time, but MYOB CEO Tim Reed argues that this is why the end of the financial year takes its toll on your wellbeing – as well as your family’s.
According to Reed, ‘It’s never too early to get organised so you spend less time on paperwork mid-year. It means less stress for you, your employees and your loved ones, and more time to focus on what matters most. If you spent the final weeks last year tackling shoe-boxes of receipts and buried in paperwork, here’s a must-have guide.’ Reed has outlined ten steps that can help planning firms avoid the last-minute dash.
Firstly, record your transactions regularly, instead of waiting until June. That means logging every sale, purchase, payment and receipt, which can be very time-consuming if you leave it until the end of the financial year. Set a weekly or fortnightly chunk in your diary aside for maintaining and updating records. Preparation should also apply to the new financial year, as this is an excellent time to reassess and tweak your business plan and ensure you’re on the right path. Investigate changes in regulations and laws that need to be implemented, and review and update your accounting software if need be.
Also, if you have inventory, you need to complete a stock-take on or just prior to 30 June, as this will allow you to write-off any obsolete stock and investigate any theft or shrinkage. Remember, the small business instant asset write-off has increased to $6,500 to help you equip yourself with what you need, and you should review your asset register, as this keeps track of your company equipment including items purchased, sold or disposed of. Contact your accountant to discuss the deductions, write-offs and rebates available to your business.
Finally, you need to reconcile your bank accounts, your accounts receivable and accounts payable. If you’re not using an online accounting solution, you should reconcile your bank accounts after receiving the final bank statement of the financial year to ensure your records match the record of your bank(s). Also, the value of open invoices must always match the balance of your receivables and you should clear all bad debts and credit notes and double-check all outstanding arrears. If your debts have been outstanding for more than 12 months and/or are considered non-recoverable, you may be able to claim a GST credit and write them off as an expense. Last of all, you need to finalise outstanding payments, debit notes and the recording of all cash payments.
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