The end of financial year is a busy time and even more so this year with the impacts of COVID-19. To help you prepare for the end of this financial year we have put together a checklist of things to get done before 30 June 2020.
- Check in with your tax agent or accountant for tax planning advice prior to 30 June 2020.
- Give yourself enough time to put in place what they suggest and make any adjustments to your accounts.
- Ask questions that manage your tax position for this financial year. Should you be topping up super? Should you be buying a new vehicle? Is this the right time to move to a company? Are there debts that you should pay off in this financial year?
Tip: To make the discussion more productive, get your accounts organised before you meet with your tax agent.
- Assess how your business has performed over the last financial year and do some forward planning to make sure you get the results you want in the next financial year.
- Put in place budgets for 2020/21 to keep your business on track.
Tip: Upload these budgets to your bookkeeping system so you can easily track budgets against actuals.
Bookkeeping & the end of financial year
- Get your accounts up-to-date for the end of financial year, ideally before you see your tax agent.
- Review the whole year, including the GST.
- Reconcile and make payments for the Owners Drawing accounts, including principle and interest.
- Review all expenses that you deferred or waived during Covid-19 and make sure you have accounted for these in your cashflow plan. This includes any tax payments, loan repayments, rental arrangements. You might want to also factor in the end of Job Keeper and Cashflow Boost.
- An interesting article that explains in details the effects of COVID-19 on the end of financial year can be found here.
- Consider taking a look at our bookkeeping and tax services here to find out how we can help you benefit from the end of the financial year.
Tip: Having your bookkeeping up-to-date allows you to make informed decisions at the end of this financial year.
- This is a good time to review expenses, insurance, cashflow and debt (both what you owe and what you are owed).
- Identify expenses that are no longer valid in your business.
- Confirm insurance coverage is current and accurate.
- Look at ways to improve cashflow so that this is not an impediment to achieving your goals in the coming year.
- Look at paying off outstanding debts in this financial year.
- Consider prepaying expenses, if cashflow allows, to really get the first month of the new financial year off to a great start.
- Follow up any money your business is owed and get this paid. Write off any bad debt.
- If getting customers to pay has been a problem, look at ways to improve this.
Tip: The start of financial year is a good time to review your prices and fee structure.
- Get your information up-to-date for your compliance requirements for the tax office, including payroll, STP, super, TAPR, BAS and Tax.
- Pay Superannuation Guarantee before 30 June 2020 to obtain a tax deduction in this financial year.
- Make additional super contributions up to the cap.
Tip: Make sure you allow enough time to chase up information from others.
Your assets & the end of financial year
- If you have stock, complete a stocktake on 30 June and update inventory.
- Update your asset and vehicle register.
- Complete the purchase of any new assets so that they can be included as an instant asset writeoff.
Tip: Any major asset purchases should be focused on generating income.
- If you have been thinking about setting up a new accounting, payroll, job tracking or management system for your business, do this now so that you can be fully operational before 1 July.