Financial year-end is coming – is your business ready?

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The end of the financial year is creeping up quickly. While you want to make sure you’ve covered all bases correctly, it doesn’t have to be a stressful time. As long as you plan ahead and get your business ready. We’ve put together a few tips to help you prepare for the end of the tax year.

Get the right advice

Just like you wouldn’t rely on an internet search for a health diagnosis, the same applies for the health of your business. Talk to your accountant or bookkeeper and work through what needs to be done before the year-end. They can help answer questions like what sort of tax should I be paying, how much do I need to pay, when do I pay it. Plus everyone’s favourite question, can I pay less?

Know as you go

Did you know that you can check in on your Xero data at any time? If you don’t have access, ask your accountant or bookkeeper to invite you in. You can create a P&L (Profit & Loss) statement or a balance sheet in Xero whenever you like. Not just at tax time. This lets you know exactly how your business is performing anytime. This is key to understanding and managing your business’s financial health. It’s important to know your up-to-date information all the time, not just at the end of financial year. Try our customisable P&L template here.

Plan your tax year

Now is a good time to work with your accountant or bookkeeper to work on a tax plan for the new year. They’re in a much better position to lower your tax bill, and ensure there are no surprises if they can put a 12-month strategy in place. We all know the more you claim, the less tax you have to pay. But you don’t want to claim for the wrong things. One good tip is to only claim business expenses, not personal. It’s also a good idea to keep sufficient records of what you spent the money on. Make it easy on yourself – store your receipts electronically by taking a photo of it and sending it directly into Xero using Hubdoc. You can also use Hubdoc to auto fetch bills and eliminate data entry.

Start the year with a clean slate

Tying up loose ends can make financial year-end much smoother. Make sure you’ve invoiced all customers correctly, and you’ve paid any due bills. Bank any cash and cheques, and check that all payments have been recognised. Also ensure outstanding bills have been entered into Xero, and all work you’ve done has been invoiced. This will make going through your records a much smoother process for your accountant or bookkeeper.

There is an easier way

A cloud accounting platform makes running your business easier and helps your accountant or bookkeeper do your accounts faster. This is because you are all working from the same set of data. It also helps you get into good habits of keeping on top of bank reconciliation. As well as storing key financial documents during the year, all making your financial year-end a breeze!

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