Countdown to tax time: what you need to do 6 weeks from 30th June – review your creditors

25th May, 2015

Tax Time

Similarly, with the process that you followed last week, you need to ensure that who your accounting software says you owe money to be correct.

If there is an account that you are disputing, why not get it settled before June 30? If this means contacting that supplier and communicating your grievance, then so bet, do it now! You may be able to negotiate a compromise, clear the air which will allow you to both move into the new financial year without unnecessary baggage.

If you do not use the Accounts Payable module in your software, just review the system that you work with ie. manual records, excel etc.

Print out a Creditors report. In MYOB AccountRight, go into Reports, select Purchases, and then select the Payable Reconciliation (summary) Report either as at 30 April 2015 or the current date depending on how up to date your file is.

What you are looking for is that only the suppliers that you still owe you money is on this list and after you review that is exactly what this list will say.

Review the Payables Reconciliation list especially the 31-60, 61-90 and 90+ day columns for accuracy and correct for the following anomalies:

  • Suppliers may have paid, however the payment hasn’t been allocated against their purchase account and will need to be corrected.
  • The supplier is simply not going to be paid as the goods have not been delivered to your satisfaction. A credit note should be raised.
  • The supplier will be paid however you have not done so as yet. No action is required in your software.

In relation to the accounts that remain unpaid, you may like to check with your accountant if you should pay these accounts before June 30. If your turnover is less than $2 million you may be able to receive a tax deduction in the current year.

If you missed last week’s blog, head to countdown to tax time: 7 weeks from 30th June – review your debtors

The information provided here is of a general nature for Australians and should not be your only source of information. Please consult an experienced and registered tax agent as each small business’s circumstance will vary.

Subscribing or upgrading your MYOB software will ensure your business is always compliant with tax changes, including the government’s new SuperStream system for paying super contributions.