With yet another End of Financial Year just around the corner it’s time to start gathering up the list of things you need to help make this time of year as pain free as possible, and to ensure you can get your information through to your Bookkeeper for prompt EOFY processing.
If you already outsource your bookkeeping smart move – this will then all be taken care of for you – if not, here are the 4 most important EOFY processes.
In summary a bank reconciliation is the process to explain the difference between the balance in your bank account and the bank balance showing in your accounting software.
At EOFY you need to ensure all bank accounts including credit cards and loan accounts are reconciled to end of month and that you have a copy of the statement to 31 March supporting this. Even if you use online accounting software you still need to reconcile these accounts.
If you carry stock within your business, EOFY is the time that you need to do a stocktake of all those products. Stock is simply your products available for sale, and the physical act of a stocktake is counting the products that you have for sale and valuing them. The value of your stock has a significant impact on the state of your accounts at End of Financial Year. Your stock value is based on the price you paid for these goods when your purchased them.
Debtors are the people who owe you money and Creditors the people you owe money to. We often see old invoices sitting on these lists which, you probably have no chance of collecting. EOFY is the time to review these and speak to your Bookkeeper about any you think are doubtful. Unless you have an arrangement in place it is unlikely that you are going to collect payment on a 12-month-old invoice, so let’s have a conversation around those that possibly need to be accounted for as bad debts.
If you have a home office and would like to claim some of those expenses you need to gather up all the expenses paid – rent or mortgage, insurance, rates, power, phone and several others are all possible. Then, complete a home office claim form and send to your bookkeeper to make the adjustment. If you don’t have a Home Office Expense form, please let us know and we will send you through a copy.
While there is much more information needed for your End of Financial year processing the above are a good start and can begin some valuable conversations with your Bookkeeper.
As always, if you have any queries with regards to the above or any other matter please contact us on 04 232 9199 or email sue@3rdArmAdmin.co.nz