Are you ready for the EOFY countdown? Time to get everything in balance!
21st March, 2017
With just three months left of the 2017 financial year, it’s time to start preparing for the dash to the finish line.
By now you should have had your 2015/2016 financial statements and tax return prepared. If not, then that needs to be your priority.
Make a call to your accountant today to see when they would like you to drop the information off to them.
Sure, you may have a 5 June lodgement date, but don’t leave it until the last minute.
You are so much better using June to focus on hitting the last of your End of Financial Year (EOFY) goals and preparing for the new financial year.
Also, if you find that you have a tax bill, better to know sooner rather than later – so pick up the phone today.
Preparing now for EOFY makes sense too as you have a bit of time and the urgency factor is not your motivation.
Tracking your profitability over the next couple of months is so important for two reasons.
Firstly, you want to make sure you are hitting your sales and profit targets.
Secondly, you want to keep a close eye on your profit figure so you can calculate your likely tax bill and whether it would be beneficial to undertake tax saving strategies before 30 June.
If you’re using accounting software such as MYOB Essentials or MYOB AccountRight, then following my “ABC EOFY” system is going to be breeze.
If you’re not, then there’s no better time of year to make the leap, import all your 2016/17 information directly from your bank and get the ball rolling.
It’s easy as ABC, EOFY!
A – Agree Debtors and Creditors
- Print Receivables Reconciliation Summary & Payables Reconciliation Summary reports
- Make sure there are no out of balances to ledger (if so, investigate and correct)
- Run your eye down the reports for accuracy and attend to any write-offs, deletion of double-up entries
B – Bank Reconciliations and BankFeeds
- Make sure you’re using MYOB BankFeeds! Data entry is old hat, time consuming, inefficient and costly
- Make sure all reconciliations are performed for bank accounts/credit card accounts and loan accounts. Then make sure the bank balances in your software ‘agree’ to the bank statements
- Confirm outstanding cheques and deposits are actually outstanding
C – Closing Motor Vehicle Odometer Reading at 31 March
- FBT year finishes on 31 March, and you should record the odometer reading for all business motor vehicles as your accountant will need this to determine if you are providing fringe benefits to yourself, your associates or your staff
- Diarise to do it again on 30 June 2017
E – Employee SGC and PAYG
- Ensure SGC Payable and PAYG Payable have been reconciled in your accounting software file. The easiest way to do this is to print your Payroll Activity Summary for the period you know you haven’t paid
- The balance for PAYG on your payroll report should balance to the amount that the Balance Sheet is saying you owe. If there’s a discrepancy and you get stuck, get your accountant or bookkeeper to have a look
- Repeat the same process for SGC.
O – Organise your tax records
- Start collecting and filing tax documents in physical folders or for those that prefer digital, scab receipts to dropbox, or secure area
- Create a folder of all the things you will need to take to your accountant after 30 June. I would have divided sections for bank statements, credit card statements, loan statements, dividend statements, rental property statements etc.
F – Finalise your end of year plans and prepare 2018 budget
- Review your current income and expenses and estimate what you think those will be in the 2018 year
- Prepare a multi -period year to date profit and loss statement and then export to excel where you can change the figures to what you think they’ll be
- Figure out what level of sales you need to achieve to make the required level of profit, and think about raising prices if you need to
- Review this information thoroughly, sit on it and once you are sure on your new pricing structure, write to your customers (maybe in May or June) advising of the increases, making them effective from 1 July
Y – YTD Profit and Loss Statement with last year’s Comparison
- Another great report to print is the YTD Profit and Loss Statement with last year’s comparison
- Identify accounts where there is a significant change on the prior year
- Review transactions to ensure they have been coded to the correct account
This process may be new to you and may seem time consuming.
However, it gets quicker and quicker the more regularly you do it and it will eventually become second nature.