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Accounting is Just the Beginning

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10 Things To Do Before the Tax Year Ends

Out with the old, in with the new? Yes, maybe, but before we get to the 1 April 2011 what should we, as business owners, be doing?

  1. If you have trading stock (unless it’s clearly not going to exceed $10,000 in value) do a stock-take. Even if you have a perpetual inventory system on your accounting software you still need to check it’s accurate. Make sure you identify and write-off any unsaleable items or stock worth less than cost.
  2. Write off any bed debts to get tax deductibility as the accounting entries must be made before 31 March. It doesn’t mean you have to stop chasing.
  3. Review your fixed assets and identify and write-off any which you’ve disposed of or stopped using.
  4. Make sure you have everything to hand for your accountant, stock-take details, accounts receivable and payable, work-in-progress, year-end bank statements, any new loan or finance paperwork and use of home details in particular.
  5. Bring forward any planned expenditure to get tax deductibility early.
  6. If you have sufficient cash reserves and the customer or client won’t mind defer income by delaying jobs until after 1 April. Don’t, like a client of mine used to, just delay invoicing until the 1 April – it’s a bit obvious!
  7. Get your accountant to help you prepare some interim financials so you can take any necessary tax-saving steps or make sure you know your up-coming tax liabilities BEFORE the year-end.
  8. Trust resolutions allocating distributionsto beneficiaries must becompleted and signed within 12 months of the Balance Date.
  9. To pay dividends before the end of this income year you’ll need to pass the appropriate resolutions prior to 31 March 2011.
  10. Get a new accountant, one who is really interested and cares about your business, who doesn’t just focus on tax and year-end financials, see Six-reasons-to-change-accountants.

If you’re not clear on anything or want to make sure you stay on the right side of the IRD just give me a ring at no cost on 0800 ASK NICK or email nick@abac.co.nz. There’s only a few days left to go!

2 Responses to 10 Things To Do Before the Tax Year Ends

  1. Thanks Joe, for your kind comments.

    How’s things in your part of the world?

  2. Joe Meyers says:

    What great tips! We’re always looking for concise lists like this to give to clients. You’re a wonderful source of information. Wish you the best in the future. Hopefully I’ll stumble upon your blog again one day!

    Joe
    Largo Accountant