So with the end of another financial year almost upon us it is time to check that your business accounts are in order ready to hand over to your accountant or for you to complete your tax return yourself. Some of these things you can get onto now, while others can’t be completed just yet (but you can always make a start).
1. Make sure your bank accounts (in your accounting software if you use it) match your bank statement balances. This will help ensure your data is complete and you haven’t missed transactions.
2. If you carry stock you may need to compete a stocktake at 31st March (you do not need to carry out a stocktake if your stock value is under $10,000 (excl. GST) an estimate will suffice, however I recommend that this is a good process to carry out regardless as it helps identify any lost/stolen or damaged items, that need to be adjusted for, as well as giving you time to check through and confirm that your inventory system is accurate.
3. Chase up any outstanding Debtors – and get as many paid before balance date as possible. Write off any that you are not going to recover.
4. Make sure you have all your accounts payable (bills) entered in your system and up to date, this includes any PAYE payable.
5. Get all your invoices sent out as soon as possible after balance date so you have an accurate reflection of Accounts Receivable.
6. If you work from home – make sure you have your bills for phone, power, insurance, rent, mortgage, rates etc. for the year to calculate and claim your home office expenses. Home office expenses are calculated by working out the % of your home & garage that you use for business purposes.
For example if your home is 100sqm and you use the spare bedroom for your work and the room is 10sqm.
10sqm (area used for business)/100sqm (total area of house) x 100 = 10% so you can claim 10% for home office as a business expense.
The calculation can get more complex if the room has dual purposes e.g. dining room & sewing table as you need to work out the amount of time used for business/private.
7. Check your assets. Have you purchased any new assets during the year? (make sure you have a copy of the invoice etc.). Have you sold or disposed of any assets during the year? (make a note/ keep invoices for these as well).
8. Make sure you keep hold of any Interest or Dividend Certificates, new loan or HP agreements.
9. If your software allows take a look over your Profit and Loss for the year and look carefully at each line, if anything seems unusual take a deeper look, any errors you find now are ones that you or your accountant don’t need to track down later which can save time and money.
Note: This is not an exhaustive list but will definitely get you on the right track, talk with your accountant to get their individual requirements, or if you have any questions you can get in touch with me at firstname.lastname@example.org
End of Financial Year Checklist is written by Rebecca from Do the Sums Bookkeeping. Do make contact with her for small business accounting assistance.
P.S. Did you enjoy this end of financial year checklist? Please share it so others can use our handy step by step guide.