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Business Tax Tips – Prepare Now – Early Start on Year End Preparations!

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Business Tax Tips – Prepare Now – Early Start on Year End Preparations!

Business Tax Tips – Prepare Now – Early Start on Year End Preparations!

It’s never too early to start preparing for Year End – that is 30 June in Aust. You can begin now, even though some tasks have to be completed AFTER 30 June.

Before you start year end complete the main basic regular tasks for the financial period being closed:

  • Bank account – you have fully reconciled your account and it agrees with your actual bank statement balance.
  • Invoices – you have entered and approved all invoices.
  • Bills – you have entered and approved all bills.
  • Expense claims – you have entered and approved all expense claims.
  • Payments received – you have banked all payments received.
  • Financial adviser role – make sure you email or call to ask if there are any issues to complete before 30 June

Once the above have been completed, accounting software company Xero recommends the following (adapt according to your own needs and software – the Reports mention are specific to Xero, but similar reports are in all the major accounting software). Xero accounting software have a great step-by-step list that also applies to all business accounting software, so take advantage of their help, as follows from their Help Centre – (Note – links are for Xero-specific topics and reports, ignore if you are on MYOB or QB or other – year end tips for these will come soon also – email us or sign-up Free for updates!)

  1. Run a GST Reconciliation report. From here you can drill down and tab to the GST Audit report for each period. Check each GST category, for example, the GST charged on income, GST charged on expenses, BAS Excluded and GST-Free Expenses for any coding and GST treatment that looks incorrect.
  2. Run a Trial Balance.
  3. Reconcile all accounts on your Balance Sheet:
  • Bank account – make sure any unpresented cheques or payments are correct. Check your imported bank balance in Xero against your actual bank balance from your bank. Use the Bank Reconciliation report to help with this.
  • Run an Aged Receivables and an Aged Payables report. Xero is designed to ensure the balance of your aged receivables and payables matches your general ledger at all times. Write off any bad debts using the credit functionality.
  • Check your BAS Return and balance for the period.
  • Ensure you know what makes up the balance of all accounts in your Balance Sheet, including loans and fixed assets.
  1. Let your financial adviser know you have finished entering data so they can log in to your organisation in Xero to see/update what you’ve done and potentially complete the rest of the process.
  2. Your financial adviser can add journals and adjustments directly into Xero. They don’t need to re-key this information.
  3. Your financial adviser is likely to verify balance sheet items and add entries for:
  • Year-end manual journals
  • Tax liability
  • Accruals
  • Work in progress
  • Depreciation
  • Loans
  • GST adjustments.

If your financial adviser is completing your accounts, they may want the paper copies of items on your Balance Sheet (such as loans, bank accounts, prepayments, GST statements) to check these against your Xero balances and ensure they are correct.

In Xero there’s no need to do a specific year end (‘roll up’) journal to bring the profit and loss balance back to 0.00. Xero’s reports are created in real-time and in the case of the Profit and Loss report it is run directly off the year-end date you’ve specified in Xero. So on any date the report is run it will be from the start of the financial year anyway. Once the new financial year starts, as long as you haven’t entered any transactions into Xero for that year, the Profit and Loss report will show 0.00.

Need help? Not sure? Call for FREE 30min advice / strategy session today!

and also get Free “Avoid these GST mistakes – there’s 18 that the Tax Office see regularly – get them right!

 

Wondering which software to get? Click on the “Get FREE Download” button above for your FREE report!

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Author: accountkeepingplus

Administration, bookkeeping and compliance for small business, Training, trouble-shooting, or we can do the books and payroll for you! Self Managed Superannuation Fund Service Provider, free support MYOB Certified Consultant, Reckon/QuickBooks Professional Partner.

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