Making Your Tax Easier by Preparing in Advance
We are fast approaching the end of the financial year, so it is time to start preparing.
Here are my 14 top tips for making your end of financial year easier for you and your accountant.
1. Call Your Accountant
The most important thing, at this time of year, is to call your accountant and make a booking to review your year to date financial position.
There is still time to implement some legal tax strategies to make sure you are not paying more tax than is required.
2. Prepare Your Paperwork
Generally, make sure that you have all the paperwork prepared for your accountant. Prepare your folders with your bank and credit card statements, information on any assets bought or sold in the financial year, any new lease information, any dividend statements, any new investments all sorted in the folders.
You can include MYOB reports at the end of the year, but since the move to cloud accounting, this isn’t really necessary as the accountant is easily able to access your accounting file, and print off the required reports when they are working on the file.
3. Discuss Salary Sacrificing and Super
Talk to your accountant about the advantages/disadvantages of salary sacrificing into a superannuation fund.
Get your financial accounts into order. What does this mean?
4. Reconcile Your Accounts
Make sure all your accounts that can be reconciled ARE reconciled. Not only bank accounts, credit card accounts, loan accounts, but inter-company loan accounts, superannuation payable accounts, PAYG Withholding and so on.
We recommend using your bank reconciliation feature in MYOB to reconcile these accounts. We also recommend using the Company Data Auditor to easily see which accounts are reconciled and when they were last reconciled.
5. Deal With the Unreconciled Transactions
In the accounts that are reconciled, look at the UNRECONCILED transactions…why are they there? Should they be reversed? Are they errors that need to be corrected?
6. Use Your Sales Register
Have a look at your sales orders. Are there sales orders that have been fulfilled that should be converted to invoices? Use your Sales Register in your MYOB software to easily see all your sales orders, and to see how many are fully paid – this is often an indication that they are fulfilled.
7. Check Out Your Accounts Rceivable and Accounts Payable Reports
Look at your accounts receivable and accounts payable reports.
In MYOB, the best ones to use are the Accounts Receivable and Payable Aging reports, as you will quickly see which ones have been outstanding for long time. As yourself, are these all true? Are there any duplicates that should be reversed out, any that should be treated as bad debts? And while you are looking, maybe think about implementing a debt collection strategy in the new year.
8. Check Out Your Invoices
Have a look at your invoices in MYOB’s Sales Register. Are there invoices where you haven’t completed the service or provided the goods? Should part of this be treated as a sales order rather than income?
9. Check Out Your Profit & Loss and Balance Sheets
Have a look at your reports in MYOB’s Accounts Reports – both the profit and loss and the balance sheet. Do the figures make sense? Are there negatives in any accounts? If so, ask some questions and have a look at why this is so.
Are there expenses that have been incorrectly allocated to the asset accounts? Are there assets that have been incorrectly allocated to the expense accounts?
10. If You Want to Reduce Your Profit – Pay Your Super Expenses
If you have a profit and want to reduce it, then pay your super expenses relating to this financial year before 30th June.
Same with any other expenses owing for this year and depending on your tax situation, you may be able to prepay expenses up to a year ahead. You would chat to your accountant about whether this is a good idea.
11. Run Reconciliation Reports
Run your Receivables Reconciliation and Payables Reconciliation and Inventory Reconciliation reports and make sure that they are all in balance. We use the Company Data Auditor to run through all of these reports.
12. If You Have Stock – Prepare For A Stocktake
If you are using stock, get prepared for a stock take at June 30.
13. Double-Check Your Payroll Figures
If you are using payroll, check that the amount that you have reported in wages to the ATO and to the state revenue office agrees to the wages that you have recorded in your file. We use the Payroll Summary report for this.
14. Get a MYOB Certified Consultant to Audit Your MYOB File
Call in a MYOB Certified Consultant to do a quick audit of your file prior to finishing the year…they will help you identify any problems with your file, help you resolve any such problems and have your file in excellent order prior to handing over to the accountant.
P.S. If you aren’t using accounting software to organise your accounts, I strongly recommend that you speak to a MYOB Certified Consultant.
They will suggest the right product for your circumstances, help you set it up correctly, train you in using it and help you when you need it. That way, when the end of the next financial year comes, you will save yourself hours of work and be much better prepared with much less stress.