While the end of financial year (EOFY) is not nearly as much fun as New Year’s Eve, it is possible for business operators to make it a less stressful experience for themselves and for those around them.
Anyone who has endured the long hours and late nights of cramming months or an entire year of paperwork into a last minute dash will agree it’s far from ideal. So will the people who have listened to the venting of those living the experience.
MYOB CEO Tim Reed says, “Day-to-day operations are demanding for business owners and managers, so it’s tempting to push aside the not-as-exciting aspects, such as book keeping, until crunch time. Being unprepared is one of the key reasons why many operators and their loved ones dread end of financial year.
“Another common hazard is being out of touch on laws and regulations that apply to owning and running a business. These change frequently - it’s important to ensure you’re up to date. For example, if you operate in building and construction, are your systems prepared for the annual reporting of contractor payments in July?
“Having been around now for 21 end of financial year periods, MYOB’s advice is to bite the bullet today and start taking small steps along the path to getting your business house in order for 1 July.”
Changes coming into effect on 1 July 2013 include:
- The superannuation guarantee rate is going up to 9.25%, with that increasing gradually to 12% by 2019
- The existing superannuation upper age limit will be removed and employers must make superannuation guarantee payments for employees 70 years and older
- Reporting of taxable payments for building and construction industry is due in July
- The Living Away From Home Allowance tax concession will change in terms of eligibility and timeframe.
Mr Reed says, “It’s never too early to get organised so you spend less time on paperwork mid-year. It means less stress for you, your employees and your loved ones, and more time to focus on what matters most. If you spent the final weeks last year tackling shoeboxes of receipts and buried in paperwork, here’s a must-have guide.”
MYOB EOFY 2013 10-step checklist (Note: a cuppa is essential)
- Don't wait for Just, record transactions regularly
Record all financial year transactions as you go and ensure that’s done prior to 30 June; this includes 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. Maintaining and updating records regularly will alleviate the pressure. If you’re not quite there yet, perhaps block out time in your diary for recording each week or fortnight.
- Create a separate copy and back it up
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 2012/2013 financial year only. Carefully save and store your 2012/2013 financial year file elsewhere in the cloud or offline. This will help streamline the transition from June to July and ensure the file is easily accessible in future.
- Get ready to stocktake
If you have inventory, you need to complete a stocktake on or just prior to 30 June. A stocktake will allow you to write-off any obsolete stock and investigate any theft or shrinkage.
- Reconcile your bank accounts
If you’re using an online accounting solution such as MYOB AccountRight Live, you’re enjoying the benefits of having your bank transactions fed directly into your data file and auto-coded – a significant time saver. If not, reconcile your bank accounts after receiving the final bank statement of the financial year to ensure your records match the record of your bank(s).
- Reconcile your accounts receivable and accounts payable
All accounts receivable need to be reconciled. The value of open invoices must always match the balance of your receivables. Make sure you clear all bad debts and credit notes and double-check all outstanding arrears. If any debts have been outstanding for more than 12 months and/or are considered non-recoverable, you may be able to claim a GST credit and write them off as an expense. Reconciling your accounts payable is a similar process, where you need to finalise outstanding payments, debit notes and the recording of all cash payments. The value of your open purchases must always match the balance of your tracking payables account.
- 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 business. 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 $6,500 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 BAS and superannuation guarantee charge statements are lodged and paid by July 28, and be sure to pay your super guarantee contributions for the fourth quarter of 2012 by 28 July 2013. If you miss this deadline, you must submit a Superannuation Guarantee charge statement to the ATO.
- Provide information to your accountant or book keeper
Once the previous steps are completed, provide all necessary financial information to your accountant or book keeper. 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.
- Final end of year adjustments
Your accountant or book keeper may want to make a number of adjustments to your reports or accounts. 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. 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. It’s also a good idea to review your accounting software and update it if it means your business will remain compliant.
MYOB CEO Tim Reed adds, “It’s easier to stay on top of end of financial year reporting when you use accounting software to help organise your financials, get a clear picture of your circumstances and keep you compliant.
“A solution such as MYOB AccountRight Live acts like a virtual assistant by automating many aspects of your financial management and lets you view your financial situation in-depth or at a glance. Importantly, it helps reduce time spent on manual data entry, which means more time for growing the business.”
Visit http://myob.com.au/EOFY for a summary of major tax changes, helpful tips and resources and more.
For further comment or other information please contact:
MYOB Public Relations Consultant
P: 02 9089 9071
M: 0449 169 997
Haystac Public Affairs
P: 02 8094 7779
M: 0409 919 508
Established in 1991, MYOB is now Australia’s largest business management solutions provider. It simplifies accounting, payroll, tax, CRM, websites, job costing, inventory management and much more for businesses of all ages, types and sizes. Over one million businesses in Australia and New Zealand have used one or more of MYOB’s 50+ products and services. Today, its solutions extend online, delivering innovation through cloud computing. This enables its clients to be more productive and make smarter connections with their staff, business partners, business advisors and customers. With a network of 20,000+ accountants, book keepers, certified consultants and other professional partners, MYOB provides support and tools that help make business life easier. Visit: http://myob.com.au/smarterconnections.