Preparing your accounts for the end of financial year
Date: 10th April 2014
Updated: March 2016
If you’re using Xero, most of the hard work for your end of financial year accounts will already be done. But regardless of the accounting system you are using, it’s a good idea to check off the following items as you get ready to hand over your files to your accountant:
- Complete your bank reconciliation for each of your bank accounts. In Xero you will know if you have any unreconciled items because the ‘Reconcile’ button will be visible on the Dashboard.
- Make sure you have all your accounts payable entered and up-to-date.
- Finish off your end-of-month billing. If you have any outstanding jobs that need to be billed, complete the invoices and send them off. Take a look at credit notes issued to customers following balance date that apply to income earned this year. If you have outstanding accounts receivable and have taken reasonable steps to recover the debt, you may be able to write it off and claim a deduction.
- If you hold stock, complete a stock-take and let your accountant know what the value of your stock was at year-end. Dispose of any obsolete lines or write the stock down to its net realisable value.
- Finish your March expense claims for any business expenses paid personally.
- Take a look at your fixed assets: can any be written off? Significant maintenance or repairs undertaken before end of year may be eligible for an early tax deduction. Check if you’re not sure where expenditure on an asset is deductible as repairs or maintenance or if it should be capitalised.
- Complete your March payroll and enter the payroll tax due for March but payable in April, as an Accounts Payable Invoice. If you use one of the payroll packages that integrate with Xero, then you only need to make sure you have finished the final March payrun. Keep in mind that amounts owed to employees such as holiday pay, bonuses, long service leave, redundancy payments can be claimed for in this year if paid within 63 days of balance date.
- Have at the ready any other documents such as investment statements, RWT certificates for interest, dividend statements, details of any new hire purchase arrangements or new loans and loan summaries from the banks. Scan these and email to your accountant.
- Run an eye over your profit and loss. Go to Reports, select the Profit and Loss, select Compare Periods, change the date to March 2016 and change the Compare With to Previous 11 Periods. Look at each line and just make sure everything looks reasonable. Sometimes ‘strange’ items will jump out at you – drill down into the detail to fix.
As always, contact us if you’d like help with any of the above or if you’re interested in switching to Xero.
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