COVID-19 & YOUR BUSINESS
Yearly reports and tax return tips
It’s that time of year again. Have you had a chance to review your business to see how you are performing? Or are you simply just too busy? Being busy doesn’t always mean you’re profitable. In order for your business to grow it is imperative to analyse performance as you go. And reviewing the accounts before the end of the year is a wise move.
It is easy now for business owners to keep updated with all of the great cloud solutions at their fingertips. With cloud enablement, businesses can be more efficient and productive too. Collaboration with accountants and bookkeepers is so much easier as they have ready access to data in order to assist you with being organised and up to date.
By being organised early and setting good processes you will make for a smoother year end. It makes for easier tax planning as you will have your information live. Your accountant can prepare year end tax planning well ahead of the year end.
With online accounting software like MYOB Essentials you can finalise your payroll year end compliance work quickly and efficiently. GST, PAYG, payroll and superannuation requirements are also performed more easily. And having access to the reporting tools within the cloud products provides information instantly for compliance lodgements.
Having live bank feeds link directly with your file keeps data up to date. If you take the time to setup your bank rules you can automate your data processing so that it doesn’t pile up. You then have reports available that are as up to date.
In preparation for Financial Year end you need to prepare the following:
- Reconcile all of your bank/credit card accounts
- Reconcile all of your loan accounts, including intercompany loans
- Balance your Receivable and Payables
- Write off bad debts
- Perform a stocktake as at 30 June
- Reconcile your Payroll/PAYG withholding and Superannuation Accounts
- Finalise STP reporting - file Summary of Payments and Verification reports
- Report Taxable Contractor Payments
- Review your payroll payments and the amounts reported for Payroll tax and Workcover
- Reconcile your GST control accounts
- Review the amounts reported to the ATO in the BAS and IAS to ensure the amount reported for the year is correct
- Run and review your profit and Loss and Balance Sheet reports
In preparation for tax other things to also consider are:
- Prepayment of expenses
- Prepayment of interest
- Depreciation and asset schedule preparation
- Whether you have treated the purchase of small assets correctly – check with your accountant on the allowable limit for immediate write off.
- Disposal of assets
- Motor vehicle deductions
- Expenses not paid but are deductible
- Make donations
- Deferring Income
- Pay your Superannuation contributions prior to 30 June if you want to claim the expense in the current financial year
- Double check your sales orders in case they are now filled and should be invoices
- Double check your purchase orders in case they are now supplied and should be bills
- Review your invoices to ensure that the services or products have been supplied – if the services or products have not been supplied at 30 June, it is possible that they should not be treated as income in the current year.
These are some of the things you can do to prepare for your year. By implementing some of these strategies above prior to year end, you ensure that you reduce the possibility of paying more tax than you really have to. That’s why it does not pay to delay doing what is crucial for every business. Forward planning makes for better business performance and allows for growth. Business owners should no longer need to be bogged down with bookwork when they have all the tools to create such efficiencies in the market place.
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.