As the end of the financial year approaches, it’s essential for Australian businesses to prepare and ensure their financial affairs are in order. Completing certain tasks before the deadline can save time, reduce stress, and help maximise tax benefits. Below we’ll guide you through an end-of-financial-year checklist specifically tailored for Australian businesses. Let’s dive in!
Review and reconcile financial records:
- Start by thoroughly reviewing your financial records, including income statements, balance sheets, and general ledgers. Reconcile bank statements, accounts receivable, and accounts payable to identify any discrepancies or errors. This process ensures accurate financial reporting and helps identify potential issues early on.
Finalise payroll and superannuation obligations:
- Complete your payroll obligations by submitting your final pay run and finalising the payroll year with the Australian Taxation Office (ATO).
Lodge and pay business activity statements (BAS):
- Submit your BAS on time to avoid penalties. Review your sales, purchases, and expenses for the financial year, and accurately report the GST amounts. If applicable, claim any input tax credits you are entitled to. Remember to pay any outstanding GST liabilities promptly.
Review and reconcile stock and inventory:
- Conduct a stocktake to assess the value of your stock and inventory. Ensure that the count matches your records, and account for any discrepancies. Write off obsolete or damaged stock, and make necessary adjustments to reflect accurate stock values.
Assess bad debts and write-offs:
- Review outstanding invoices and assess the likelihood of recovery. Identify any bad debts that are unlikely to be collected and write them off as a deduction. Consult with your accountant or financial advisor to ensure proper treatment of bad debts for taxation purposes.
Review and maximise deductions:
- Take the time to review your business expenses and identify any tax-deductible items. Common deductions include business-related travel, home office expenses, professional fees, subscriptions, and equipment purchases. Keep proper documentation for all deductions to support your claims.
- Ensure that all employee superannuation contributions are paid and cleared by the due date. Familiarise yourself with the current contribution caps and eligibility requirements to avoid unnecessary penalties or tax implications.
Employee entitlements and compliance:
- Verify that employee entitlements, such as annual leave, long service leave, and termination payments, are correctly calculated and up to date. Familiarise yourself with any legislative changes that may impact leave entitlements or compliance requirements.
Seek professional advice:
- Engage with a qualified accountant or tax advisor to review your financial records, ensure compliance, and provide guidance on maximising deductions. They can assist with identifying potential tax-saving strategies, reviewing your business structure, and answering any specific questions related to your business.
- In addition to organising your finances, the end of the financial year presents an excellent opportunity to assess the overall state of your business. Once you have completed and lodged your tax return, why not leverage this moment to conduct a comprehensive business assessment?
The end of the financial year is a crucial time for Australian businesses to wrap up their financial affairs and ensure compliance with taxation regulations. By following this end-of-financial-year checklist, you can streamline the process, minimise errors, and potentially maximise tax benefits. Remember to consult with professionals when necessary and maintain accurate records throughout the year. By taking proactive steps, you’ll set your business up for success in the coming financial year.
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