The good news is that modern accounting software has come a long way. With platforms such as Xero leading the way in “accounting programs for the people” business owners can do more and more of their own bookkeeping. For some small business owners, managing their own finances works well. However, for many more, the reality is that unless you have a solid understanding of accounting and bookkeeping principles, you’re often doing your business finances a disservice by trying to DIY (and we’ve learnt that first hand).
If you’re feeling more overwhelmed than prepared for the end of financial year, Lisa Turner from Accounted for You has some very helpful advice to get you through the next few weeks, and perhaps be more prepared for next year.
Are your books ready for tax time?
No one needs to be reminded; we all know it’s almost the end of financial year and that all our bookwork should be up-to-date. Are you completely organised and have someone looking after your books for you? Or, like many small business owners, have you been putting off getting your finances in order?
Get your priorities straight
The most important aspect to have ready by EOFY is that your financial data is up-to-date. That’s the record of your money coming in and going out. The benefit of using accounting software like Xero and QuickBooks is that small business owners can have much of their financial data automated, so you can upload invoices straight into the software and there’s a nice, clean record of everything.
Do as much as you can before your accountant starts
The more you can do for your accountant, the more money and time you’ll save when they go to lodge your tax return. If your books are in a state, it’s going to take them longer to set everything straight. If you’re managing your books yourself, take a few hours (or 10) to sit down and get everything sorted. If you just don’t have that kind of time, or you think it’s time to get some help, this is where a bookkeeper can step in to make tax time (and the rest of the year) a breeze.
A quick checklist before EOFY
- Check your receivable and payables.Do they reconcile to the balance sheet? Is there something you need to pay or write off as a bad debt. If you’re on cash reporting, make sure your bank reconciliations are up to date so your GST submissions are right.
- If you carry inventory are stock levels right? Do you do regular stocktakes or need to do one?
- Clearing accounts. Are all your GST, PAYG, super etc balances correct or do you need help to balance them?
- Check in with your Accountant to see if there is anything they recommend you need to do before they start preparing your tax return.
- Take a look at this handy checklist from the Government’s Business website.
If you do need help, make sure you get the right kind
If the above checklist made you feel a bit uneasy (ok, so maybe you’re freaking out), don’t just hire the first bookkeeper that pops up on Google. It’s important that both your bookkeeper and accountant are registered with the Tax Practitioners board. It goes without saying that your accountant must be registered in order to lodge a tax return, however it’s important your bookkeeper is also registered, as otherwise they are very limited in what they can actually do for you. And isn’t the whole point of hiring them to make your life easier?