As we draw to a close on this current financial year, its a good time to reflect on the year that was and what you want to change for the new year ahead.
We’re here to help you look at your options and give you the advice you need to make the right decisions to achieve your goals. Don’t hesitate to give us a call to organise a meeting.
This month we’re talking about :
- 10 Essential Tasks for EOFY
- Are you SuperStream ready?
- How to use the end of the financial year to strengthen your position.
CASE STUDY: Good news story
A couple recently retired and their previous accountant told them they did not have to pay capital gains tax on the sale of their rental property.
He was wrong.
The clients got hit with interest of $5,900. They are on the age pension and John was able to get the interest written off.
Here’s what they had to say:
On behalf of my wife and myself I wish to pass on to you and your staff our late but very sincere thanks to all of you regarding our problem with the ATO over our failure to pay capital gains tax. If it was not for your company’s expertise and experience in this matter, the end result for us would have been horrendous. The added bonus of the ATO refund following the appeal process by your company was really appreciated. Once again, thank you to yourself and your staff.
As we rapidly approach the end of the financial year, NOW is the time to focus on the best strategies to reduce your tax where possible, to streamline your accounting and bookkeeping procedures, and to forward plan for the new financial year.
Of course the best way to do this is to come in and have a chat with us, so we can discuss your situation and give you personalised advice.
However, to get you thinking, we’ve put together a few tips:
Tax planning strategies
- Top up your super contributions
- Delay invoicing or receipting your income until 1 July
- Realise capital losses to offset against capital gains made during the year
- Small businesses with a turnover under $2 million can claim an immediate deduction for the cost of depreciable assets costing less than $1,000 and certain prepayments (e.g. lease and rent expenses)
- Get rid of slow-moving stock and write-off obsolete stock before 30 June
- Write off bad debts and claim back the GST credits where the debt has been outstanding for more than 12 months
- Review PAYG instalment obligations and consider varying the instalment for the June quarter where the estimate of business income tax payable for the year is less than the instalments raised by the ATO
Accounting & bookkeeping
- Ensure that BAS lodgements and super guarantee contributions are up-to-date
- Behind on tax and BAS payments? Ensure that payment arrangements have been entered into with the ATO and are complied with
- Report salary sacrifice contributions and certain fringe benefits on employee’s PAYG Payment Summaries
- Back up the data file prior to rollover and ensure your records are in good shape
- Review GST codes for profit & loss and balance sheet accounts for correctness
- Have cut-off procedures to ensure matching of income and expenses. For example, ensure suppliers provide the relevant invoices for all purchases and expenses for the period up to the end of June. Also identify work in progress or sales not yet invoiced and raise the relevant invoices for the period up to 30 June.
- Complete stocktakes of inventory. Any unders/overs of stock quantities and spoilage identified from the stocktake process should then be adjusted in the stock module by 30 June and thereby reflected in the financial statements.
- Complete stocktakes of fixed assets. Any adjustments required to the assets register identified in the assets stock take for issues including description, location, quantity and damage/obsolescence needs to be made in the assets module by 30 June and thereby reflected in the financial statements.
- Review the balance sheet and profit & loss statement to confirm:
- Bank accounts and loans are reconciled.
- Receivables and Payables subsidiary ledgers are reconciled to the general ledger.
- GST accounts and PAYG withholding are reconciled to the business activity statements.
- Wages in the profit & loss is reconciled to the PAYG Payment Summaries.
- Capital items such as plant & equipment purchases have not been expensed as repairs.
- Amounts in suspense have been allocated to the appropriate account.
- Fringe benefits tax has been paid on deductions claimed for employees private expenses.
- Material differences to the prior year can be explained.
Planning for the new financial year
There are a few things you can do to improve on the performance of your business this year:
- Prepare/update your business plan to provide solid focus and direction
- Update the budgets for the next 12 months and compare actual to budget.
- Review your current accounting software and upgrade to the latest version to take advantage of new features, or talk to us about other options
- Review credit terms with suppliers and customers and make changes if required
- Review insurances to ensure adequate level of coverage
- Reduce costs in areas identified as excessive in the current year
- Implement new internal control systems to address weaknesses identified
If you need any help at all with your planning, please get in touch. We are here to support you and give you the right advice, whatever stage you’re at.
Disclaimer: This information is provided as a guide only and is not intended to constitute advice whether legal or professional. You should obtain appropriate advice concerning your particular circumstances.
We’re now one month into the new year, how are things going so far? Have you got all your plans in place? If not, we can help with budgeting, cashflow forecasting and general advice to help you ensure you reach your goals this year. Come in and see us or we can come to you.
This month we’re talking about Tips for managing your cashflow, Demystifying SMSFs and providing handy links for ATO small business news and free webinars.