End of the Financial Year
It is that time of year again, where we are starting to prepare for the new financial year. For most of you this is the 31st March, or it can be 31st May or 30th June for those in rural industries or local government.
Now is a good time to be thinking about organising all the information we need to prepare your financial statements and tax returns, and perhaps any changes you want to make to your financial processes for the coming financial year.
- Review your asset schedule to see if there are any assets that can be written off. You will find a copy of these in last year's accounts, or get in touch and we can send you a copy.
- Did you purchase any new assets during the year? Invoices will need to be provided to your accountant for these assets so we can include the depreciation for them. With all that happened last year, Inland Revenue has increased the asset threshold from $500 (excluding GST) to $5,000 (excluding GST) which will apply for the 2021 year only.
- Have you completed a physical stocktake as close to your end of year date as possible? What is the value of this stock? Stock is valued at the cost price of the item purchased excluding GST. This does effect your profit and tax payments so needs to be accurate. If you want to discuss options for tracking stock, get in touch.
- Have you counted your livestock? This will need to be done closer to your end of year which will probably be May or June.
- Review your accounts receivable list, are there any invoices that are not going to be paid which we can write off as bad debts.
- We can show you how to do this in Xero.
- A reminder that business records must be kept for seven years unless it's a trust, then it is the life of the trust
- How are you keeping your business records - electronically or on paper? Let us know if you want help transferring to electronic in future.
- Contact the office for alternative methods to dropping in records.
- We can also send you a checklist of what you need to provide.
- Other important documents that your we will generally ask for are:
- Bank statements confirming the balance of your bank accounts at year end
- Loan documents confirming the balance of your loans at year end, including the amount of interest paid (tax deductible expense) and principal paid (not a tax deductible expense).
If you paid donations to registered charities throughout the year, did you know you can claim a rebate on these donations? The registered charities would have provided you with a receipt or a summary of payments made for the financial year. Provide these to us and we will include them in your tax return.
If you have earned any dividend income, interest income or overseas income, this also needs to be accounted for in your tax returns. This income has usually had tax deducted when it was paid so we can also claim this tax deduction. Documents for this will need to be provided to us as well.
If some of your work is completed from home, you will be able to claim a % of your home costs as a home office expense. If you provide us with the sqm area of your office and your total home sqm, we will work thisout for you. Costs we can claim a % of include Electricity, Phone & Internet, Rates, Rent, Mortgage Interest, House and Contents Insurance.
If you are running a farm, the rules around this vary slightly. We will work out what you can claim based on the % of your home and land area.
Please do not hesitate to contact us for any support with your accounts and financial processing. We are more than happy to help!
As a farmer, Christine understands our business and how farmers and growers operate.
We use Rural Accountants to provide a full accounting service to an orcharding partnership which operates a number of orchards with a wide spread of varieties and management systems. Rural Accountants are always timely and accurate, and their annual financial accounts are extremely easy to understand and very grower-friendly.
Rural Accountants is a real asset to our business.
The team at Rural Accountants pretty much manage all our administrative tasks for the group including payroll and tax planning, ensuring we don’t pay any more than necessary. They are at the forefront of technology and have helped us get up and running with Xero and Figured which is much more efficient than the way we used to work.
Christine is very knowledgeable, great to deal with and knows our business well. She is also a sheep & beef farmer so knows the industry really well and understands our needs.
Rural Accountants keeps us on track through strategic and forward planning meetings throughout the year. Christine knows our business inside out so she can deal with our questions instantly.
What Our Customers Think
I used to work out my GST and process it manually which would take me at least a full day every two months. Angelina then set up reconcilliations rules and other quick tools, and showed me how to do all my reconcilliations and process my GST returns through Xero which now takes me no time at all!