End-of-financial-year housekeeping

23 May 2011

With the end of the financial year a mere five weeks away, May is an opportune time to look at the health and position of your business. 

Reviewing your position is about making sure that your business has attended to its tax housekeeping and includes a number of elements:

• Writing off any damaged or obsolete stock;
• Writing off any bad debts;
• Scrapping any obsolete plant and writing it off your asset register;
• Ensuring any loan payments necessary to satisfy Division 7A loan agreements are made; and
• Complete any inter entity management charges.

All of these actions need to be taken before June 30 and your accounts need to reflect that the actions were completed e.g., a bad debt that is written off should be reversed out of your debtors ledger before June 30.

The best housekeeping cannot be done after 30 June since there is no accounting magic in causing cash movements, physical and legal arrangements as part of your return compilation process. Many effective tax strategies must be done at the right time.

Getting a Business Health Check is valuable for tax planning and ensuring that you have your cash flow in order, that you’re making the most of the tax breaks you do have access to and it’s a great way to clear the decks for a new financial year.

Give Bates Cosgrave a call on 02 9957 4033 to get your housekeeping underway.

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