End of financial year is fast approaching and for software users now is time to start working towards getting ready for 30 June. These include payroll year end preparation, debtor review and review of bank reconciliations.
Payroll is a very important part of year end preparation which coincides with the preparation of PAYG summaries, Superannuation reporting and in many cases WorkCover annual reconciliations. In regards to PAYG summaries, ensure all pays have been completed and once the final payroll run is completed for the year review payroll reports to PAYG summaries prepared by the software. You are looking for issues such as all pays having been recorded and all labels on the PAYG summary being correct. Make all corrections and once happy that all details are correct prepare and distribute PAYG Annual Summaries to team members and lodge the annual report with the ATO. Many people have started emailing out PAYG summaries and also lodging the annual report electronically with the ATO. To lodge electronically you will require access to the ATO Business Portal or talk to your accountants.
This financial year end will also see the need to utilise Super stream to complete all superannuation contributions. This can be down via most software providers or via alternatives such as the ATO Super stream service. This will require all Superannuation for employees to be made by electronic means for reporting purposes.
Before completing the end of year books it is also the time to review your debtors list and write off all bad debts to ensure taxation and if applicable GST adjustments are taken up. This is also the opportunity to correct for any receipts that have not been correctly matched up to the correct invoices, especially if this has resulted in a double up of income.
In regards to Bank Reconciliations, review the report each month, but even more so the June report to ensure that all outstanding payments and deposits are able to be accounted for. If there are stale cheque have them cancelled and if required reissued. In the case of double up entries there is one entry that has been reconciled but also an unreconciled entry, reverse the second unreconciled entry. Also if there are outstanding deposits you believe to be correct, ensure that those amounts have been recorded correctly by your bank and not lost.
June is also the time to review profit and loss reports and balance sheets to ensure you are correctly allocating entries. Examples to look at are BAS payments in recording Fuel Tax credits, PAYG and GST to appropriate accounts in the reports. The same applies to payments for Superannuation and salary sacrifice where there are liabilities raised on the Balance Sheet, but payments then allocated to expenses. Examples are finance payments being treated as expenses and Lease payments often treated as loan payments. These are often an ongoing education matter between the accountant and those doing the book work.