AUTHOR: Katharine Terry
… and what a year it has been! The 2021 financial year, unlike its hybrid predecessor, has taken place completely under the shadow of the pandemic. Sporadic lockdowns, social distancing and the ongoing absence of international tourism have all affected business performance. While some businesses in regional locations have felt insulated from the direct effects of COVID-19, the business landscape continues to change and shift before our eyes.
With all the distractions over the past 18-months, just keeping your business going as usual has been enough without thinking too much on the ins and outs of your operation, but at this time of year it is these finer details, your incomings and outgoings, that you’re going to want to have on record.
If your business had to pivot to continue to operate under dramatically different conditions, you may have been distracted from your usual record-keeping practices. You may not have kept track of unusual arrangements you entered with suppliers or customers.
NOW you need to bring it all together. This is the time to put the jigsaw together, so you and the Australian Tax Office (ATO) know how your business has fared this financial year.
This does not have to mean late nights sifting through bills and dockets or trawling through your bank statements to see if you have received customer payments. While keeping up is always better than catching up with your financial records, digitisation and regulatory changes mean that you most likely aren’t too far behind.
BAS reporting means that your records should be up to date to the end of last quarter, at the earliest, and if you aren’t required to report quarterly, you most likely only have a low volume of transactions to catch up on.
The Single Touch Payroll system means that you shouldn’t have to revisit your staff payments. You will have to make sure that any subsidies you received to pay them are correctly entered so they don’t look like normal income received and distort the actual income you made from your business operations.
Your task now is to tie up all those subsidies, grants, rebates, and changes to your normal business in a format usable by your accountant and the ATO. This is quite manageable, and your bookkeeping software or bookkeeper would already have the processes to make this happen and can help you finalise everything you need.
Other loose ends you may need to tidy up have come from your normal operations. Some questions you may need to consider are:
- Do you have works in progress, or finished work yet to be delivered?
- Is all your completed work invoiced?
- Have you kept track of your expenses through the year?
- What is a valid business expense?
- Will you try to skew your accounts to minimise tax or maximise profit for potential sale, or will you try to account for everything accurately for a clear picture of your business performance over the year?
To ‘get your house in order’ for the tax season, read the related articles for more information about:
- Expenses and
- Asset Assessment
Register here for access to these FREE articles.