As the financial year draws to a close with regard to your business’ finances, you will want to ensure your bookkeeping is in order. It’s around this time of the year that you should consider writing off bad debts in good time in order to qualify for a tax deduction.
There are particular tasks your business needs to consider for the end of the financial year, including:
- Profits & Losses
Your business’s profit and loss statement or income statement is the basic summary of your expenses, costs and revenue accumulated. By having this sheet available, you will have a better understanding of how your business is performing. For example, if the cost of sales is above your budget, perhaps you need to source a different supplier.
If your annual income is more than $2 million you are required by law to provide a stocktake for tax purposes, or if your inventory scale has changed by more than $5000 since the last financial year. You can also find out more information regarding inventory management here.
- Record of Debtors & Creditors
It is imperative you keep a clear, updated record of your debtors and creditors to ensure your business runs smoothly into the new fiscal year. You should ensure your bad debts are recorded and submitted before the end of the financial year to avoid losing out on a tax deduction.
- Asset & Expense Records
The reason why your business needs to keep a track-record of your assets and expenses is because over time your equipment may depreciate. This needs to be tabulated and submitted if you require any tax deduction for your assets and business equipment. Expenses may have increased in the past year, so this must be noted in your statements.
Ensure your employee superannuation is up-to-date, providing accurate records showing the amounts your business has contributed. Failure to provide the proper records in the time allocated before the close of the financial year may preclude you from an entitlement to any deductions.
Undertaking these tasks in preparation for the end of the financial year may aide in a smoot transition into the new year with business as usual.
For advice or information regarding your end of year tax returns or other accounting requirements, contact us for professional help today.
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