Time to look at your business as the financial year ends

We are approaching the end of March and for many this means the end of the financial year. There are several things that need consideration to enable accurate reporting of your financial results for the year.

Some of the matters that need to be considered are:

Bad debts — debts that are no longer collectible for whatever reason need to be written off in your debtor’s ledger for the end of the year.

Stocktake — for those businesses holding stock you will need to complete a stock take at the end of the financial year to ensure accurate stock is recorded in your financial accounts. For those businesses that run stock ledgers this will be a good time to verify that your stock ledger is accurate by comparing the electronic records against physical stock on hand. This can be a very useful exercise in identifying any issues around stock loss.

Obsolete stock — this is a good opportunity to address stock that is no longer saleable or has become obsolete, and either remove it from your stock system completely, reduce its value or look at ways of moving this stock for at least some return. Annual leave balances of staff — this is often an overlooked business liability and it is important to regularly review balances of leave owed to key staff. This can be a significant cash cost to businesses whose staff have built up large leave balances over time.

Creditors — review creditors ledger to ensure this is accurate, that the only amounts showing as owing are what is owed to creditors. If not already completed a monthly reconciliation to creditor statements is worthwhile and is particularly important at year end.

Fixed assets — review your fixed asset register to ensure you still own everything on the register, keep records of items sold and purchased and those that have been scrapped.

This is not a full list of considerations for the end of the year but will give you some key things to consider.

This is also a good time to look at improvements for the new financial year that could make it easier to track your profitability and could also save you time once you have progressed past initial set up and training.

Accounting software — this is a great time to review how you run your business, look to implement new software at the start of a new financial year, there are several cost effective simple options in the market that suit businesses of all sizes.

Payroll software — with the new rules around payday filing there is no time like now to update from manual record keeping to an electronic payroll system, as with accounting software there are many simple cost-effective options in the market, your current adviser will be able to assist with suggestions and setup.

■ This information is general in nature and readers should seek specialist advice before making financial decisions.

‘The This is also a good time to look at improvements for new financial year that could make it easier to track your profitability and could also save you time once you have progressed past initial set up and training.’