Think it’s too early to start preparing for the end of financial year? Think again! June 30 is almost upon us, but if you’re like most small businesses and have all of your receipts stuffed in a shoe box, it might be time to start thinking about what needs to be done to prepare for that annual visit to your accountant.
If you’re dreading this time consuming task, then think about outsourcing it to a Virtual Assistant. We can help you sort through your receipts, do your monthly bank reconciliations, list your debtors and creditors and get all your documents prepared for your accountant.
And if you still don’t want the hassle or worry of doing this job month by month in the new financial year, a Virtual Assistant can help you keep on top of your bookkeeping requirements by doing these jobs at month end, so it’s not something that you have to worry about at the end of each financial year.
It doesn’t matter what the size of your business is. Keeping proper records is important not only for calculating your income tax and BAS payments, but also for determining the financial health of your business. Below are some tips to help you get organised.
Collect your receipts
Organising your receipts can be painful, but doing it now can save you time later on. All business owners are required to keep records for 5 years in either electronic or paper form. These include:
- sales records (i.e. invoices, vouchers, receipts, credit card statements and cash register tapes)
- purchase/expense records (invoices, receipts, cheque butts, credit card and bank statements)
- employee records such as wages and superannuation details, and PAYG Payment Summaries
- end of year tax records (i.e. motor vehicle expenses, debtors and creditors list, stocktake sheets and asset purchases).
Organise your records
This is the list of what you need to prepare:
- Listing of Accounts Receivables (debtors or people that owe you money) as at 30th June
- Listing of Accounts Payables (creditors or people that you owe money to) as at 30th June
- Review your Accounts Receivable (debtors) and write off invoices which you deem cannot be recovered.
- Employees PAYG Payment Summaries
- A stock take on 30th June
- Employees PAYG Payment Summaries
- Employees Superannuation records
Review & Reconcile
When reviewing your financial records, there are a few basic things you should undertake.
- Prepare bank reconciliation for each bank account. This will compare the transactions in your records against your bank statement.
- Missing transactions can be added to ensure accuracy
- Duplicate transactions are easier to find and correct
- Unpresented amounts are identified and will provide the business with a true bank account balance
- You can make changes to earlier transactions. However, keep your accountant in the loop. They may have an impact on your next BAS or require your old BAS to be amended.
- Match your receipts against your bank transactions. If there are missing receipts, you should acquire copies from your suppliers.
Calculate Income and Expenses
Go through each income and expense category and calculate a sub-total. If you are registered for GST and prepare a BAS, then you need to exclude the GST to determine the GST exclusive amounts required for tax return reporting. You’re now ready to see your accountant about preparing your income tax return, should you have an accountant review your books.
It’s important to note that the income and expenses on your tax return are calculated on a GST-exclusive basis unless of course your turnover is less than $75,000 per annum and you are not registered for GST.