Lets talk about that time of the year again………the end of the financial year (EOFY)!!
No matter what your balance date is, all businesses need to go through the same preparations for their EOFY. The more information you are able to provide, the less time it will take your accountant to get your accounts and tax returns prepared, and as the saying goes, “time is money” .. The following simple steps will make both yours and your accountants life a lot easier at EOFY.
Accounting Software:
Ensure that all of your coding is up to date and the bank account has been reconciled. Also check that your accountant has the required access to your software to enable them to import the transactions seamlessly into their system.
If you are using systems such as Xero or Farm Focus, you have the ability to attach copies of invoices & remittances to each transaction within the program – this means all information is in one place. If you are unsure how to do this talk to your accountant.
Documents that need to be provided:
Completed & signed questionnaire –it is necessary for your accountant to have a completed and signed questionnaire on file to meet Inland Revenue compliance requirements so that they can act on your behalf.
Bank Statements and Loan Statements as at balance date – your accountant needs these to verify the balance of these accounts.
Confirmation of Stock on Hand – whether it’s livestock or trading stock your accountant needs to know what stock you owned at balance date. If your trading stock is in excess of $10,000 you need to do a full stock take.
If it is less than $10,000, you can provide an estimate of stock on hand. If you own livestock, you should provide a detailed reconciliation of all livestock classes at EOFY.
Investments (shares, term deposits, investment portfolios) – please provide all details of shares and investments at balance date and any transactions during the year, along with details of income received during the year.
Accounts Payable & Receivable – please ensure you provide details of any purchases made before balance date but paid after balance date, and sale proceeds received after balance date for sales made prior to balance date.
Wage Records – as your accountant will be reconciling the total you have paid in wages with records the IRD holds, please ensure you advise of any allowances/deductions included in any of your employees’ wages so that this can be taken into account when completing these reconciliations.
Other important items – there are a number of other items your accountant may ask for each year, including invoices for any capital expenditure, invoices for any repairs & maintenance expenditure costing more than $1,000, invoices for any legal fees paid and any documents for legal transactions during the year (property purchases & sales, gifting, deeds of acknowledgement of debt etc).
If you ensure all the requested information is provided this will assist your accountant in providing your financial statements and tax returns in a timely & cost-efficient manner.
By Cheri Henricksen, B.B.S. Cheri is an Associate with MCI & Associates. Cheri’s home life looks a lot like her work life – Cheri and her husband are equity partners in a sheep and beef farm, and doing their finances is her job. She knows the highs and lows of farming and that the effort is worth the lifestyle. And just like our clients, she would work every hour to keep it.
Disclaimer: The opinions expressed in this article are those of the author. The information and opinions published should not be a substitute for accounting advice. No liability is assumed by the author, MCI & Associates or the publisher for losses suffered by any person or organisation relying directly or indirectly on this article.