Directors of small businesses are advised to ensure their businesses bite the bullet today and start taking tiny steps to get their houses in order for 1 July.
Indeed, MYOB CEO Tim Reed cautions them to avoid the long hours and late nights of cramming months or an entire year of paperwork into a last-minute dash ahead of the end of financial year (EOFY). They should also ensure they are up to date with changes in the laws and regulations that apply to their businesses.
MYOB provides this EOFY 10-step checklist for directors:
- Do not wait for 30 June. Record transactions regularly as you go and before 30 June, including all sales, purchases, payment and receipts. It may sound obvious, but logging your transactions can be very time-consuming if left until June or July. If you’re not quite there yet, perhaps block out time in your diary for recording each week or fortnight.
- Whether you’re working on your accounts in the cloud or on your desktop, you need to make a point-in-time backup outside your accounting system that creates a data file for the 2016-17 financial year only. Carefully save and store your 2016-17 financial year file elsewhere in the cloud or This will help streamline the transition from June to July and ensure the file is easily accessible in future.
- Get ready to stocktake. A stocktake will allow you to write-off any obsolete stock and investigate any theft or shrinkage.
- Reconcile your bank
- Reconcile your accounts receivable and accounts payable.
- Take advantage of deductions, write-offs and rebates before June 30. Contact your accountant to discuss the deductions, write-offs and rebates available to your Take action to scrap worthless stock, plant and equipment before June 30 by reviewing your asset register (which keeps track of your company equipment including items purchased, sold or disposed of). Remember, the small business instant asset write-off has increased to $20,000 to help you equip yourself with what you need.
- Review accounts and reports. This should be one of the last steps you complete before handing everything over to your accountant or book keeper. If the previous steps have been completed correctly, then reviewing your accounts and reports should be a simple matter of ensuring everything matches up and you have the required supporting documentation. Ensure your business activity statement and superannuation guarantee charge statements are lodged and paid by 28 July, and be sure to pay your super guarantee contributions for the fourth quarter of 2017 by 28 July 2017. If you miss this deadline, you must submit a superannuation guarantee charge statement to the Australian Taxation Office.
- Provide all necessary financial information to your accountant or bookkeeper. There are several options – for example, have them make a point-in-time copy from your data file in the cloud or provide them with a secure copy of your backed-up files. Check what best suits them.
- Your accountant or bookkeeper may want to make a number of adjustments to your reports or statements. Once changes have been updated, lock all accounts relating to that year so that data remains accurate. This will help ensure an easy transition into the new financial year.
- Prepare for the new financial year.
“The end of financial year shouldn’t be all reports and numbers,” says Reed. “It’s also a good time to reassess and tweak your business plan and ensure you’re on the right path for next financial year. Familiarise yourself with regulation and law changes and implement these business changes before the start of the new financial year.”