Why Do I Need to Prepare for the End of Financial Year?
End of Financial Year preparation throughout the year and getting yourself and your business ready is important so that your books are in order for your income tax return to properly reflect how your year has been, and make it as easy for you and your WK Advisor/Accountant as possible.
For most businesses in New Zealand the ‘Financial Year’ is from 1 April to 31 March. Businesses are required to submit an income tax return to Inland Revenue in order to calculate how much income tax you’ll need to pay.
Things to Do During the Year to Ensure a Hassle-Free End of Financial Year:
Regularly staying on top of your bookkeeping tasks throughout the year is a great way prepare for the End of Financial Year and makes it as easy as possible for yourself and your WK accountant.
It’s good practice to keep all of your records for your business throughout year; your WK accountant won’t necessarily need all of these records, but we might need to query you on some things so make sure you hold onto your records of the follow items:
Keeping Accounts Records Of:
- A record of your closing bank balance(s) at the balance date.
- Ensure all bank feeds are reconciled up to the balance date.
- If you do not use Xero live bank fees, you’ll need to hand over all bank statements for all your business accounts for the entirety of the Financial Year.
Loan/Financial Agreement Statements
- Statements show any new investment(s), loans or hire-purchase(s) taken out during the year.
- Details of any business funds or assets used or purchased privately during the year.
- We’ll need to know the closing balance on any loans at your year-end date.
Business Credit Card Statements
- Reconcile your credit cards in Xero, or provide us with these statements throughout the year.
- If you have a personal credit card that you occasionally pay for business expenses on, highlighting these on the statements will make it a lot easier on our end.
- Upload your purchase invoices and expense receipts to Xero throughout the year. This is useful for your won storage, and makes it more efficient for your WK advisor when preparing your annual accounts.
- Specific purchase invoices your WK advisor may require include any large purchased, legal expenses and insurance payments
- All income from sales invoices, paid and unpaid (these details will already be in Xero if you use it).
- If WK does not handle your payroll, ensure proper records are kept during the year on your payroll programme.
- Details of any transactions, including the invoice(s), that you were unsure of how to treat during the year.
- We will need to reconcile your cash so keeping records of your petty cash receipts and and petty cash balance at year-end is important
- Completing your March stocktake
Business Vehicle(s) Details
- If necessary, keep record of all your business vehicle log books and mileage records throughout the year.
Keeping Tax Return Records Of:
- Keep record of any private superannuation payments received during the year
- We will need records of any additional income you received from any source; including dividends received, any interest earned, rental income (including details on your property management expenses, mortgage interest and overseas income).
- We will need records of any employment income you receive additional to your business income (if applicable)
Check your provisional tax due dates here.
How does the End of Financial Year Process Work with Xero and WK?
Xero have provided the following guidelines and instructions for small business owners to make the End of Financial Year process as straightforward as possible for both us and you.
Make sure you do these things for the financial period being closed:
- Fully reconcile all of your bank accounts and ensure they agree with the balances from your bank statements.
- Enter and approve all invoices, bills, and expense claims.
- Bank all payments you’ve received.
- Invite your accountant to be a user, if you have not already