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

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Sue Pak

Mar 9, 2020

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 documents do I need to gather up? What sort of tax should I have paid? How much more do I need to pay and 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 year-end. This lets you know exactly how your business is performing at any time. 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 the financial year. Try our customisable P&L template here.

Plan your year ahead

Now is a good time to work with your accountant or bookkeeper to work on a plan for the new year. They’re in a much better position to help you budget and talk about your taxes. They can also help put a 12-month strategy in place to ensure there are no surprises.

We all want to claim as many expenses as we can, but you don’t want to claim for the wrong things. One good tip is to seperate business expenses from personal expenses by using different credit cards and bank accounts. It’s also a good idea to keep sufficient records of what you have spent the money on, and store your receipts electronically as you go. Using something like Hubdoc means you can take photos of receipts and send them directly to Xero while you’re on the go. 

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 complete your year-end accounts faster. This is because you are all working from the same set of data and it is always up-to-date – no messy backlog to deal with. Keeping on top of bank reconciliation also helps you stay in touch with what’s happening in your business. All of this, plus storing key financial documents in the cloud during the year, makes your financial year-end a breeze!

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