As the end of the financial year (EOFY) draws closer, many SMEs report they are not waiting until after June 30 to get their compliance obligations in order.
In the March 2014 MYOB Business Monitor, nearly a third (31 per cent) of SMEs reported they start preparing their financial reports at least a month before EOFY.
Only 12 per cent reported not starting preparation until two months after the financial year ends.
The survey also found that most SME owners are in for a tough few weeks ahead, and could have to sacrifice more than they usually do, as they grapple with EOFY requirements.
31 per cent reported working weekends, 20 per cent have worked past midnight and 14 per cent turned down invitations to catch up with friends.
“Hey mate, wanna grab a beer?” “Nope, I can’t. The end of the financial year is upon us…”
Anyway, whether you have already made a lot of progress or are yet to start, MYOB CEO Tim Reed has the following top five tips for preparing for the end of the financial year:
1. Take advantage of deductions, write-offs and rebates
Contact your accountant to discuss the deductions, write-offs and rebates available to your business before June 30. Make it a point to get rid of any worthless stock, plant and equipment you may be sitting on by reviewing your asset register.
2. Provide relevant information to your accountant
Provide all necessary financial information to your accountant or bookkeeper, and make sure you don’t leave anything out.
You can have them make a point-in-time copy from your data file in the cloud, or avail them with a secure copy of your backed up files. Check what best suits them.
3. Finalise end of year adjustments
Your accountant or bookkeeper may want to make a number of adjustments to your reports or accounts. Once changes have been updated, lock all accounts relating to that year so that data remains accurate.
This will help ensure a smooth transition into the new financial year.
4. Create a separate copy of your accounts and back it up
Whether you’re working on your accounts in the cloud or on your desktop, you should seriously consider making a point-in-time backup outside your accounting system that creates a data file for the 2013/2014 financial year only.
Carefully save and store your 2013/2014 financial year file elsewhere in the cloud or offline.
5. Prepare for the new financial year
The end of financial year shouldn’t be all reports and numbers. It’s also a good time to reassess and tweak your business plan and ensure you’re on the right path for the next financial year.
It’s a good idea to review your accounting software and think about how your business can embrace and benefit from new technology, such as cloud accounting solutions.
In short, get organised now. Don’t leave it until June 30.