With the end of the financial year just around the corner, it’s time to think about the things that you will need to do before the 31st March and the information that you will need to get ready to provide your accountant or bookkeeper.
What do I need to do to get ready for the end of the financial year?
Here’s a quick list of the things your accountant or bookkeeper is likely to ask for:
- Bank Statements for 1st April to 31st March
- Stock on Hand
- Debtors at 31st March
- Creditors at 31st March
- Payroll records including PAYE returns
- GST returns
- List of Assets (over $500) you have purchased throughout the year
- Loan statements showing total interest and repayments made for the year
- Home Office Expenses - eg home power, phone, rates, insurance, mortgage interest statement or rent
- Any items taken for personal use
- Bad debts
Vehicle Log book - if relevant
If you have used Xero throughout the year, a lot of this information could already be in Xero so check with your accountant if you are unsure.
Some of these things could have an impact on your tax for the year, so it’s a good idea to address them now so you’re prepared because nobody wants to pay more tax than they need to.
Stock - If you carry trading stock, you will need to do a stocktake of goods that you have on hand for sale at 31st March. These need to be valued at the cost you bought them for and if you’re GST registered, you will need to advise your accountant whether your stocktake figures includes or excludes GST.
Some of you may be considering rushing out and buying more stock before the 31st March thinking that this will reduce your tax. That’s not necessarily the case as an adjustment is required to account for stock that was purchased before 31st March that won’t be sold until the next financial year. So don’t run your funds short buying unnecessary stock that is going to sit on your shelf in an effort to reduce your tax.
Another item your accountant or bookkeeper will want to know when it comes to your stock, is whether you have taken anything for personal use throughout the year. Make a note of this so that an adjustment can be calculated for this.
Expenses - If there are any expenses that you are planning on incurring in the near future e.g. repairing equipment, advertising or stationery; you make want to look at sorting some of these expenses before 31st March. Be careful though as there are conditions on this, so you might like to touch base with your accountant or bookkeeper if you have any doubts.
Assets - Are there any assets on last year’s accounts that you no longer have? You might have sold them, or they could have reached the end of their useful life and have been thrown away. You will need to let your accountant know so that any old assets can be written off. If you’ve purchased any assets throughout the year that is over $500, make a note of these so they can be added onto your Asset Schedule.
Don’t rush off and buy new assets over $500 before 31st March either thinking that this will reduce your tax. These items will need to be depreciated over time and the costs apportioned over a number of years rather than being able to claim it all in the year you bought it.
Debtors (People who Owe You Money) - If you have some old bills that you are having trouble getting paid for, we suggest you make a list of these and discuss them with your accountant. If its unlikely that you are ever going to be paid for them, an adjustment could be made to account for them as “Bad Debts”.
For Companies - For Companies, it’s a good idea to review what you have taken out of the business before 31st March and repay this if necessary. If you have drawn out more than the Company owes you for the year, you could be liable for interest charges on any funds that you have overdrawn. If you are unsure how to figure this out, you might want to talk to your accountant before then.
You may also like to consider declaring a dividend and paying out dividends before the end of the financial year. There are a few things to consider before doing this (e.g. the fact it doesn’t reduce your company tax and/or whether the company has paid enough tax up until now) so we suggest you get advice on this first.
If you are in doubt or would like clarification on any of these issues, don’t hesitate to give us a call.