Preparing for year end
The 30 June 2016 financial year-end is quickly approaching. Now is the time to complete a range of administration tasks in preparation for the end of the financial year and set plans for the financial period.
Here is a checklist we recommend our clients work through prior to 30 June 2016:
1) Update your bookkeeping
- Reconcile your accounts
- Process all outstanding transactions
- Meet with your bookkeeper to discuss any year end entries required
2) Meet with your accountant
- Review end of year accounting entries:
- Debtors Write Off (Uncollectable debts)
- Inventory Adjustments (Stocktake)
- Year End Accruals
- Employee bonus payments
- Goodwill / IP adjustments
3) Meet with your tax accountant
- Plan for your tax reporting obligations (Company Tax & 30 June 2016 BAS Returns)
- Tax planning for the new year
4) Prepare year end profit & loss and balance sheet
- Review year on year movements
- Analyse profit margins
- Consider holding sales for slow moving stock
- Review key suppliers to for competitiveness
- Review pricing strategy
- Review key expenses (insurance, rent etc)
5) Financial Forecasts and KPI Setting
- Prepare 12 month financial forecasts
- Set daily, weekly and monthly targets
As your business grows the value of using an experienced and qualified accountant such as Accent Business Services will provide an increasing return on your investment.
Accent Services can ensure your financials are in good standing, that you are up to date with your reporting requirements and avoiding costly penalty notices.
By letting the Accent Services take control of these non-core services such as bookkeeping your time can be better spent on the business rather than in it. Accent Services are located in South Yarra (Melbourne), call the team today to make a no obligation or cost initial consultation. (accentservices.com.au)
Can your Accountant advise you on your Self Managed Superannuation Fund (SMSF)?
Accountants are generally the first stop when it comes to setting up a Self Managed Superannuation Fund (SMSF) and operating the fund, however the actual SMSF Advice provided by Accountants has always been limited by strict regulations. As of 1 July 2016 these limitations are about to get even tighter.
An Australian Financial Services License (AFSL), legally must be held by any person or business who advises or deals in financial products or services. Up until 1 July 2016, specific to SMSFs, services and advice is deemed as ‘financial advice’ unless explicitly associated with:
- Tax advice and planning
- Accounting and administration advice
- Guidance on compliance with SMSF laws and regulations
The ‘accountants’ exemption’ which has allowed accountants to provide advice on the establishment of self-managed superannuation funds (SMSF), without the need for an Australian financial services licence (AFS licence) will cease on 1 July 2016.
To minimise any impact to our clients, Accent Business Services is partnering with Brookline Finance (www.brooklinegroup.com.au) , who are highly credible Financial Advisors and hold an AFS Licence. Under this arrangement Accent Business Services Accountants, will still be to set up Self Managed Superannuation Fund (SMSF).
Choosing the Right Accounting Package for your Business
Regardless of the size and nature of your business, selecting the right technology to capture your core business transactions is key to being able to accurately measure financial performance.
The following 3 tips can be helpful in your decision making:
Tip 1 – Size Matters
If you are a start-up or small business, your accounting system requirements will differ compared to medium-large companies. Due to lower volume transactions, smaller number of employees, creditors and debtors, an off-the shelf accounting system can provide a practical solution. As your company experiences, a more customised accounting software solution will become more relevant to be able to handle an increase in capacity and any added complexity.
Tip 2 – Its All About The Cloud
Cloud based software and systems are the ‘in thing’ at the moment. Everything seems to be stored somewhere in a cloud! So what is this cloud based accounting and why should you get on board?
Cloud based accounting gives you the flexibility as a business owner or your management team to access your financials anytime and from anywhere. Its real-time financial data at your finger tips to help fast track decision making and monitor performance.
Tip 3 –Know Your Budget
Allocating a realistic budget towards your accounting system and budget can help eliminate expensive choices. When determining the budget amount you are prepared to allocate, the following considerations can be helpful:
• Installation setup costs and ongoing maintenance/licence fees
• Training costs (initial and potentially on-going)
• Consider your existing technology infrastructure and its compatibility
Overall, the important thing is to keep the selection process simple and align your selection with your strategic business objectives.
How Often Should you Meet with your Accountant?
Experts are constantly telling us that relationships are complex and can be hard work. Your relationship with your Accountant should be a healthy and straight forward one, don’t be shy to catch up on a regular basis.
Understanding and monitoring your business’ financial performance is critical and generally your Accountant holds the key to the information you need most. Staying on top of your debtors/creditors and understanding the ‘ins’ and ‘outs’ of your cash flow helps you make decisions about your operations and business investments.
Meeting your Accountant on a monthly basis can be very helpful in assessing performance and identifying any emerging financial risks. Catching these risks early means that mitigation strategies can be implemented on a timely basis, which can be a significant competitive advantage.
Tax Planning for the New Year
Firstly, what does tax planning actually mean?
As per the ATO website“You have the right to arrange your financial affairs to keep your tax to a minimum – this is often referred to as tax planning, or tax-effective investing.”
However, what is key is that tax planning should be performed with caution, any tax efficiency strategies need to be implemented lawfully.
A tax advisor can provide helpful guidance in interpreting tax law. They can provide guidance on understanding how tax works in relation to your investment, so that you don’t pay more tax than you need to. Tax planning may mean reducing your taxable income by negatively gearing an investment property or through salary sacrifice arrangement, or increasing your claimable deductions by donating to a charity.