Ride the EOFY wave

We're into the pointy end of the year.  Just over a month until EOFY and when panic seems to set in for most people.

It doesn't have to cause stress.  Its all about organisation and preparation.

Ideally you have been keeping your records in order all year, so when July 1 ticks over, it should be a simple of matter of running payments summaries for employees, final bank and GST reconciliations before lodging your June BAS, and move forward in the new financial year.

But let's be realistic, for most this doesn't happen.  

My top tips for getting through EOFY:

1. Once you have entered all invoices and receipts for the year, prepare an annual Bank reconciliation for all your business bank accounts and confirm the balances in your accounting system match the statement balances.  Investigate any variances. There may be omissions or duplications.

2. Review the balances of asset and liability accounts to ensure the year end balances represent amounts due/owed.  Eg Loans, leases, fixed assets.

3. Reconcile gross wages, PAYG withheld and Superannuation in your Payroll system to your accounting records.  Even if you have an integrated system like Xero differences can arise due to incorrect coding of payments (eg net wages being expensed rather than reconciled to Wages Payable) or incorrect treatment of allowances and deductions.

Once balances are confirmed, prepare PAYG Payment Summaries for all employees and distribute by 14th July deadline. The Annual reports need to be lodged wth ATO by 14 August.

4. Review Aged Receivable and Aged Payable reports.  Follow up any sales invoices owing to you and ensure what is showing as bills outstanding is only those that are actually owing.  Clean up any anomalies.

5. Ensure you have copies of all receipts and invoices to support income and expenses.  The tax man does not allow deductions without a valid receipt.  We recommend an online document management system so that all important docs are at hand.

6. Reconcile your GST account for the year to date to ensure you have claimed everything.   It will also highlight any GST amounts recorded in a period after you've lodged a previous BAS (whether by mistake or as a result of an adjustment). Adjustments < $10,000 and within 18 months of the due date of the BAS in which the error was made can be claimed in your current BAS.

7. Review the performance of your business in the last financial year.  Try to pinpoint the peak and trough periods to map your financial requirements in the new financial year.  Set up a budget to track your performance throughout the year.

8. Review your business plan or write one if you don't have one.  It doesn't have to be complicated.  A business plan is simply the goals you have for your business eg growth, diversification, higher turnover, and how you are going to make it happen.

9. If you are in the Building and Construction Industry and pay Subcontractors for their labour, you need to prepare a Taxable Payments Annual Report and lodge with ATO by 28 August.

10. If you are a retailer or hold inventory, you will need to perform a stocktake before June 30 to account for your stock on hand.   Vend have recently introduced a FREE inventory counter to make this process quicker and easier. Check it out here: http://bit.ly/1Z7sLHV

Finally, if you need expert advice, ensure you engage the services of a Registered Tax Agent or BAS Agent, Qualified Accountant or Bookkeeper who can advise you correctly.  Mistakes are costly.