Beyond the 30th June rush: Handling post EOFY challenges
With the start of the new financial year, most businesses feel the year-end pressure is easing. The books may be closed, year-end transactions may be completed, but the EOFY is not an end, but the beginning of reviews, reconciliations, reporting, and compliance.
The post-EOFY period is important for reviewing reports and ensuring records are accurate and complete before meeting tax and compliance obligations during the tax-filing period.
While for businesses the EOFY marks the end of the financial year, the real work for accounting firms only begins after that.
In the weeks following EOFY, the accounting firms are busy with the following activities.
- Collections of outstanding documents, if any, from the clients.
- Reconciliation of accounts and reviewing work papers
- Preparation of financial statements
- Begin tax return preparation
- Finalising payroll and superannuation reporting
- Organising lodgment schedules and deadlines
- Attend to client queries and compliance requirements
An accounting firm that handles multiple clients across various industries and at different stages of readiness for post-EOFY processes might find it difficult to manage them all at once and could add pressure on existing resources.
Here are the common challenges accounting firms face in the post-EOFY phase
Delay in document collection
The accounting firms will not be able to start tax work once the EOFY is over; they need to wait for information from their clients, such as bank statements, invoices, receipts, payroll records, loan statements, and other financial documents.
The delay in collecting these documents can delay tax filing and other crucial processes post-EOFY.
Increased compliance work
The preparation of tax returns, financial statements, and payroll reconciliations requires increased compliance monitoring during this period.
Constraints on resources
Accounting firms need to balance their day-to-day client-based activities, such as providing strategic advice, cash flow management, and tax planning, with post-EOFY activities, such as tax return preparation, financial statement preparation, and compliance reviews.
Balancing these demands places constraints on existing resources.
Frequent client queries
Accounting firms handling multiple businesses might have various queries from them, such as the requirement of financial statements, resolving a tax-related query, or updates on the progress of tax returns. Managing client queries alongside routine workload can be demanding and time-consuming.
A five-point post-EOFY checklist for accounting firms
- Do you have all the required client documents?
- Are all the reconciliations and workpapers up to date?
- Is your tax-return pipeline clearly planned?
- Are payroll, superannuation, and compliance obligations being reviewed?
- Does your team have the capacity to handle the surge in workload?
Looking beyond EOFY
For businesses, the EOFY might be the key milestone, but for accounting firms, the month that follows it is equally crucial. What makes the post-EOFY journey smooth is a structured approach, backed by the right operational support, which leads to efficient handling of workload during EOFY and tax season.
