2nd January, 2020
With end of the financial year only a few short months away, it’s time to start preparing. If you’re an MYOB AccountRight user, here’s a specific set of steps that will help you get your tax affairs in order.
The end of financial year workload has changed dramatically over the years. Moving from flurries of paperwork to desktop software and now to the cloud, business bookkeeping looks very different to its original form.
What hasn’t changed is the amount of pressure business owners and managers tend to feel at this time. Luckily, if you have a solid online accounting software like MYOB AccountRight 2019, you have everything you need for EOFY to go as smoothly as possible.
To help you on your way, here are my 14 top tips for making your end of financial year easier (for you and your accountant):
The most important thing at this time of year is to book some time with your accountant before the end of the financial year. With cloud accounting, you and your accountant can review your file online and chat over the phone.
Get this done while there’s still time to implement legal tax strategies to make sure you’re not paying more tax than is required.
Not sure if your accountant is right for you? Be sure to get onto shopping for a new tax advisor well in advance of your submission deadlines or you’ll be potentially causing yourself a lot more stress than necessary.
READ: Six questions to ask an accountant before you hire them
Make sure that you have all physical paperwork or electronic copies prepared for your accountant.
Your accountant will likely need 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, and possibly contract details.
Talk to your accountant about the advantages and disadvantages of salary sacrificing into a superannuation fund.
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. Any account that’s a clearing account can be reconciled back to zero.
Check any suspense accounts too and make sure the transactions are dealt with.
I recommend using your bank reconciliation feature in MYOB to reconcile these accounts. In AccountRight, I also recommend using the Company Data Auditor to easily see which accounts are reconciled and when they were last reconciled.
In the accounts that are reconciled, look at the unreconciled transactions and identify why they haven’t been reconciled.
There are reconciliation reports that you can run that list all unreconciled transactions.
Have a look at your sales orders. Are there sales orders that have been fulfilled that should be converted to invoices?
Use 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.
Look at your accounts receivable and accounts payable reports.
In MYOB, the best ones to use are the Unpaid Invoices and Unpaid Bills reports, as you will quickly see which ones have been outstanding for long time.
Ask 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.
Have a look at your invoices in Sales History. Are there invoices where you haven’t completed the service or provided the goods? Should part of this be treated as a sales quote rather than income?
Have a look at your 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?
Remember too that the ATO is allowing instant write offs of new assets up to $30,000 for the financial year 2020. Check with your accountant to see if this is appropriate for your circumstances.
If you have a profit and want to reduce it, then pay your super expenses relating to this financial year before 30 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 should chat to your accountant about whether this is a good idea.
This includes your Sales Reconciliation and Bills Reconciliation reports and make sure that they are all in balance.
If you are using stock, get prepared for a stock take at 30 June.
Getting an accurate valuation is important, as is writing off obsolete stock and missing stock. It will have an impact on your Profit and Loss figure for the year.
READ: 7 steps to a successful stock take
If you’re 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. I like to use the MYOB Payroll Summary report for this.
With Single Touch Payroll, you can check the figures you have reported on the ATO portal.
A MYOB Certified Consultant can ease the stress and quickly 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.
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’ll save yourself hours of work and be much better prepared with much less stress.
You can also compare MYOB online accounting software – there’s a solution for every stage of your business.