End of Year Financial Checklist

The end of financial year can be stressful especially if you are not 100% confident of what you are doing. With the tax year-end fast approaching for most taxpayers, there are a number of steps that you can take prior to 31 March to help you maximise any tax opportunities that you are entitled to. The list below identifies some of these steps together with important tax reminders.

If you have any questions, please contact customer support team ([email protected]) or your assigned accountant for further details and/or clarification.

Writing off bad debts: Have you written off all bad debts? Bad debts should be reviewed and actually written off in your debtor ledger prior to 31 March for them to be allowed as a deduction in the financial year. Please review your Accounts Receivable list and write off any that are not recoverable.

Pre-pay expenses: Pre-pay tax deductible expenses before March 31 will minimise your tax bill. Some categories of business expenses can be pre-paid without any limitations, meaning that you can claim as much as you like. Some of these prepayment concessions have a dollar limit and/or a limit on the length of the period after year-end.

Examples of prepaid expenses that could be claimed: stationery, vehicle registration, accounting fees and postal charges. Most other expense categories have caps that limit the amount that can be claimed in a year such as advertising (up to 6 months after the balance date and not exceeding $14,000 total), insurance (up to 12 months after the balance date and not exceeding $12,000 total), rent (up to 6 months after the balance date and not exceeding $26,000 in total).

Donations: Companies (other than LTC’s) are allowed a deduction for gifts of money made during the year to organisations which are approved for donation tax credit purposes. However, donations are deductible only to the extent of the company’s taxable income for the year.

Stock take: The value of your stock affects your business’s taxable profit position. Please go through stocktake before year end and get rid of any damaged, out-of-date or obsolete stock to save tax and have a correct and up to date figure of what your sock levels are.

Repair and Maintenance: Do any repairs to pay less tax. Repair and maintenance under $500 can be deducted as an expense rather than capitalised. Please review fixed asset register to do repairs prior to 31 March and pay less tax.

A fixed asset can be deducted as an expense rather than capitalised providing the cost of the warranty can be separately identified. Review fixed asset register to ensure genuine R&M has been expensed and not capitalised to fixed assets.

Getting your Accounts done in Xero: Reconcile all your business bank, credit card & loan accounts. Nothing should be left unreconciled. Run the General Ledger report with a view of finding coding errors. Check all coding for consistency and correctness (Don’t know how to run general ledger report? Click here). Find and record if there is any coding errors (Don’t know how to fix coding errors? Click here). Run your Profit & Loss and Balance Sheet report for the las 12 months between 1 April to 31 March, does it make sense? Supply all information requested by your accountant so they can enter the year-end entries and prepare financial statement.