Happy New Financial Year

A new financial year is an important time for all kinds of businesses, from sole traders to big corporate. It is not only to meet your tax obligations with the Australian Taxation Office, but also the perfect time to plan for the next 12 months of your business.

There is certainly lots to do as a small business owner as you focus on year-end accounting and bookkeeping tasks besides some planning for the new financial year. To help you organise your financial records, Pitt Martin has put together a handy EOFY checklist for businesses.

• You need to ensure your BAS lodgements are up-to-date and accurate. This is not only making it easier for you to finalise your financial statements but also avoid penalty from the ATO
• You need to ensure your superannuation guarantee (SG) contributions are accurate and up to date. Please note that your March SG is due 28 April 2020 and if you have previous quarters outstanding, you need to act as soon as possible or contact your accountant and bookkeeper for guidance.
• If you are reporting to the ATO via Single Touch Payroll (STP), you are exempt from lodging a PAYG payment summary (Group Certificate) annual report for the amount you’ve reported through STP and from providing payment summaries to your employees so long as you undertake the finalisation declaration by the appropriate date. Please note that you can finalise your employees’ EOFY payroll information through your STP enabled software as soon as you have reconciled the information. Otherwise, you have up until 31 July to do so. Your employees will be able to access their income statements via myGov under the employment tab. If they do not have a myGov account and cannot create one, or do not have a registered agent, you can direct them to contact ATO on 13 28 61.
• You need to ensure that you keep records for at least 5 years, and they are compliant with the ATO requirements
• If you prepared your bookkeeping during the year, please make sure you have your accountant to review the transactions and GST codes assigned to the Profit and Loss and Balance Sheet items to ensure you are lodging a correct BAS.
• The stocktake of your inventory should be done by 30 June 2020, if your business carries stock. Any adjustment on stock quantities and wastage should be reflected in the 2020 accounts.
• If you maintain an asset register for your business, you need to review with your accountant or bookkeeper and remove any assets that had been disposed of or write off. Speak to your accountant about the instant asset write-off that the government introduced as part of the Australian Government’s economic response to coronavirus.
• You need to ensure the following have been completed and reflected in your Profit and Loss and Balance Sheet,
  • Bank accounts, petty cash, prepayments, credit cards, borrowing cost, loans, Chattel Mortgages, and Division 7A Loans are reconciled
  • Depreciation has been properly accounted up to 30 June 2020 in the Profit and Loss and Balance Sheet
  • Review your Debtors and Creditors balance to ensure the accuracy
  • GST and PAYG withholding accounts are reconciled to the June quarter BAS
  • Wages and Superannuation in the Profit and Loss are reconciled to the Payment Summaries.
  • Superannuation Payable in the Balance Sheet is reconciled to the June quarter superannuation guarantee contributions
  • Review the suspense account and ensure all amounts are allocated to the appropriate account
  • Ensure there have been no personal expenses claimed as business expenses

With many businesses facing unprecedented challenges from COVID-19, there is no better time for small business owners to start afresh and thinking about improving their current business performance.

We have included additional checklist which hopefully can help you improve your business performance and financial health going forward,

• You need to revisit your business plan and adjust accordingly to provide a better and clearer direction for your business amid the pandemic. You need to think about what areas of your business do you want to improve? Your accountant can be an important resource to help you put in place a plan to get where you want your business to be.
• You need to update your cash flow budgets for the next 12 months by comparing it to the actual performance. Cash flow is the lifeblood of your small business and needs to be looked at closely for your business to sustain. Review your pricing structure and if you need to raise your price, now is the best time to do. Again, your accountant will be able to assist in the pricing and cash flow budgets.
• You need to review your business insurances or public liability to ensure you have a sufficient level of coverage
• You need to review your financing arrangements to ensure that you have a better deal
• You need to review your own personal insurances including life insurance and income protection insurance to ensure you have adequate coverage should your circumstances have changed
• You need to review your health and safety policies and procedures to ensure your workplace is COVID Safe by following the guidance from the government for the safety plan.
• If you are still using a spreadsheet or other manual accounting system, you might want to consider switching to cloud-based accounting software. Your accountant will be able to assist you with the transition.

In the face of uncertainty caused by the global pandemic, actions taken now can have an immediate impact on how quickly your business rebounds from the global downturn.

Need Help?

If you are unsure whether your accounts are ready for year end, or whether your BAS, super and STP reporting are up to date, Pitt Martin Group can help you review and document your business records, weigh up reconciliations, stocktake and asset write-offs, and prepare accurate financial statements before the new year begins.

As Sydney tax accountants, we assist businesses with year-end accounts, BAS lodgement and practical cash flow advice.

Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group, Sydney tax accountants, is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.

Pitt Martin Group qualifications include over fifteen years of professional experience in accounting industry, Registered Australia Tax Agents, membership certification of the Chartered Accountants Australia and New Zealand (CA ANZ), certified External Examiner of the Law Societies of New South Wales, Victoria, and Western Australia Law Trust Accounts, membership certification of the Finance Brokers Association of Australia Limited (FBAA), Registered Agents of the Australian Securities and Investments Commission (ASIC), certified Advisor of accounting software such as XERO, QUICKBOOKS, MYOB, etc.

This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.