The end of the financial year is slowly creeping up on us, and that means the slate is almost ready to be wiped clean and a new set of goals and accountabilities are ready to kick in. Unlike this time last year, we aren’t so much staring into the abyss of uncertainty but looking to the 2022 financial year with a positive mindset harboring new goals and ambitions to meet the times. So, question for you – are you ready to say ‘cheerio old mate’ to the 2021 financial year? Saying your ‘see ya laters’ means getting your A into G, putting your admin cap on, and pulling together the important information we’ll be chasing you for at the start of the financial year. We’ve jotted down the 6 ways to get end of financial year ready as a business owner.
It’s pretty easy to get wrapped up in the magic of the business’ front line, but as you’d know from GST time, leaving the cleaning of the back-end of the business to the last minute can make you want to pull your hair out (to put it nicely). Take time before the end of March to sit down and organise your records. This means pulling together key figures and estimates prior to the end of the year, as well as chasing items you know we will need to prepare your accounts. Think - invoices, receipts, logbooks, wage records, bank statements, loan documents, dividend statements, RWT certificates, home office information – the works. We’ll need everything up until 31 March. So, it’s good to have a fair idea before then where to find this information, as well as taking the time to gather the figures that won't change.
For the majority, the end of the financial year coincides with the end of the GST period – let’s just say April is just as hectic as March for bean counters and business owners alike. So, when the clock strikes midnight on 31 March get yourself on that computer and reconcile your Xero ASAP… okay, maybe midnight isn’t a necessity, but the first few days of April would be ace! Regardless of whether you’re GST registered, we still need you to reconcile your Xero to the end of the financial year, and the sooner the better on this one.
Have a flick through the outstanding payables and receivables on Xero and ask yourself the following questions: Have these amounts been paid? Do we need to get remittance advice? Are the amounts expected to be received, or should they be written off as bad debts? It’s important to keep track of payables and receivables throughout the year (and you’re likely to have had us chasing you on these already around GST time). Following up on old outstanding bills prior to the end of the financial year is essential so you know whether they're likely to be received as well as if you need to account for any adjustments. This ultimately saves chasing time on both your end and our end when it comes to preparing your annuals.
Get ready for some old school counting! If your business holds stock, we will need your closing stock figure as at 31 March 2021. This means considering obsolete or damaged stock and adjusting stock on hand to represent an accurate figure. This can be done before 31 March, as long as it shows an accurate picture and you don’t have rapidly changing stock amounts. It’s a good idea to get the team together for this, as the front line might have a better idea of stock fluctuations and damaged stock.
Did you put your investor cap on this year? If so, we are in the need to know! Pull your confirmation documents together and have them ready to hand over come 31 March. This also goes for any dividend statements and any new loans drawn down over the year - we need it all!
If you received any COVID-19 government support in the 2020 financial year, it’s a good idea to pull any supporting documents together for safe keeping. This includes any confirmations of wage subsidy, government loans, and grant information. It’s important to have your supporting documents on hand, especially after last week’s sudden alert level change. On that note, the Government Resurgence Support Payment applications open today for businesses that experienced at least a 30% drop in revenue for the recent 7-day level change period (as well as other factors). It’s likely you will have to provide the relevant financial information to show this, so tick to another reason for getting your documents in order. Click here to have a read of what the RSP is all about or give your Outside go-to a bell.
You will be wanting to pat your March self on the back when the team come looking for the information at the start of the financial year. If you found we were constantly hunting you for information last year, it’s a good idea to have a look back at what we were asking for. You may need to provide it again for the 2021 financial year. As usual, following the start of the financial year, we will be sending out our annual questionnaires, where we’ll let you know exactly what we need to get cracking. Remember, "the early bird catches the worm", so the faster you get the information to us, the faster we can let you know your tax obligation for the year. You scratch ours, we’ll scratch yours –bingo!
Your Outside team, Ruby, Fizz and Rocket
Mail: PO Box 24-457, Wellington 6142
Phone: 04 889 2975