As June 30 approaches, Australian businesses gear up for the annual year-end accounting ritual. But year-end accounting isn’t just about ticking off the Australian Tax Office’s (ATO) compliance requirements. It’s also a practical strategy to set your business up for success over the next 12 months and beyond. Our year-end accounting checklist makes this often stressful time of year a whole lot easier.
Our simple 6-step year-end accounting checklist
If you want to make year-end accounting and tax planning easier, follow this 6-step checklist:
- Reconcile financial statements
Reconciliation is a crucial process in EOFY procedures, involving a thorough comparison of actual transactions with supporting documentation to detect discrepancies or errors. This step allows you to identify and address issues before reporting to the ATO, ensuring both compliance and accuracy. Key tasks include reconciling bank accounts and loans, reviewing receivables and payables reports, verifying wage and superannuation figures and ensuring consistency in GST and PAYG withholding accounts.
- Conduct a stocktake
If your business buys or sells stock, you’ll need to complete a stocktake before June 30. This is necessary to confirm your inventory levels match the figures stated in your financial statements. It’s important to keep accurate stocktake records when completing the stocktake, including a complete list of stock on hand, the value of the stock and how it was calculated, who performed the stocktake, plus when and how it was done.
- Prepare and lodge your tax return
Your tax return will determine the amount of tax your business has to pay for the previous year. It’s calculated by subtracting your deductions from your assessable income. To facilitate the tax return process, you’ll need essential documents like your Profit and Loss Statement, showcasing your overall profit or loss for the year, the Balance Sheet displaying your company’s assets and liabilities, the Statement of Cash Flows revealing all transactions affecting your business’s cash account, and your previous year’s tax return.
- Ensure you remain compliant
To navigate year-end accounting smoothly and stay on the right side of ATO compliance requirements, you’ll need to ensure you keep accurate financial records throughout the year. EOFY is a good time to conduct internal audits, verifying that your business operations align with both industry standards and regulatory requirements. You’ll also need to stay informed about any changes in industry tax laws or regulations that might impact your business.
- Meet payroll and superannuation obligations
At the end of the fiscal year, you’ll need to provide employees with a summary of their earnings, taxes and any additional money they put into superannuation. Make sure that any extra super contributions and special work benefits are recorded correctly in your payroll system. Check that the required Super Guarantee (SG) contributions align with what your employees earn. It’s also a good idea to review salaries against relevant awards and statutory requirements.
- Plan for the next financial year
Setting goals and creating a financial plan for the new fiscal year can set your business up for long-term success. It can also help you take advantage of opportunities to reduce your taxable income. Be sure to identify potential deductions that could positively impact your financial outlook. This could include making necessary purchases or investments before year-end to capitalise on available tax benefits now, instead of 12 months’ time.
How to make your year-end accounting stress-free
With so much to do, year-end accounting can be a stressful and overwhelming process. However, it doesn’t have to put such an enormous strain on your business. Finding an outsourcing partner for your Accounting and Bookkeeping, such as Sundaram Business Services, is a simple strategy to make life easier for yourself and your team.
Sundaram Business Services can not only make your end-of-year accounting stress-free, but we also offer year-round accounting and bookkeeping support for your business. Our Engagement Model ensures we achieve the best possible results. This means you can outsource your time-consuming tasks, without sacrificing quality or accuracy. Get in touch today to find out how we can become a seamless extension of your team.
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Sundaram Business Services is a business process outsourcing company with offices in Australia, India and the UK. With over 20 years’ experience in the Australian market in providing outsourced teams to Australian businesses across Accountancy, Portfolio Management, Self-Managed Super Funds, and Mortgage Broker Support, our business becomes an extension of yours.
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