Top Tips and Resolutions for Australia’s New Financial Year
For any accountants who have been preparing their end of financial year reports, the last few months are likely to have been pretty stressful. However, there are many things that accountants can implement as we head into the new financial year to make their lives easier when they come to preparing their documentation for the year ahead.
If, like me, your organisation’s financial year-ends on the 30th June, you’ll no doubt have been busy preparing all of the necessary documentation needed to demonstrate how your business has performed.
For instance, going through your company’s balance sheet to verify that all assets and liability accounts are correct and have the supporting documentation is just one of the many checks accountants need to have performed. Going through expenses and ensuring that they are tracked to the correct tax year is also part of the end of year routine.
All accountants are able to perform these processes, however, the real stress of financial year-end comes from the fact that they need to be able to oversee the day-to-day running of their organisation’s accounts while pulling together a mass of retrospective reporting.
What’s more, to compound the stress of the period even more, accountants need to deploy forensic accuracy when it comes to reporting their company’s performance –particularly given the fines and penalties that can be incurred for late and inaccurate documentation.
All of this is enough to cause any professional a certain degree of stress, and there will be many accountants breathing a sigh of relief once the 30th June has passed. However, there’s really no need for the end of the financial year to be so stressful for accountants.
By following the steps below, accountants can reduce the pressure of reporting and start as they mean to go on by deploying some New (Financial) Year resolutions.
Timing is everything
Having a clear plan in place for your financial year-end reporting is the key to hitting important deadlines and milestones.
Given the penalties that can be incurred as a result of a failure to comply, you need to have a strategy mapped outright from the beginning of the year. For example, you and your finance team should have a planner set out which indicates key ATO submission dates, and also a list of internal deadlines for pulling together certain reports. What’s more, you should put together a checklist for the new tax year which sets out what preparatory measures you need to take in order to ensure the smooth reporting of your company’s performance. For instance making sure you’ve kept up to date with tax changes starting in the new financial year, and ensuring that all of your accounting software is updated to coincide with the New Year is essential. It’s by putting these incremental steps in place that you can ensure you produce a timely and hassle-free return.
Make use of the available technology
Incorporating technology into your company’s financial processes is a must. The end of the financial year really does demonstrate why more businesses need to be using technology to perform basic accounting processes.
For instance, while recently pulling together my company’s own year-end reports, I was able to look back at a whole year’s worth of data at the click of a button. It was that simple. Using software management tools can provide a whole host of vital data not only quickly but in a format that is accurate and easy to digest.
For instance employee expenses data, up-to-date financial statements, a detailed record of financial transactions from the year and GST reconciliation can all be accessed by having the right software packages in place. Many systems now on the market can produce data which needs no editing by the finance team using it – meaning that bespoke data can be produced rapidly for things like tax returns and other statutory administration.
Starting as you mean to go on
As part of having a clear strategy in place for the beginning of the new financial year, companies should look at how they can automate certain financial processes across their organisation. Having automation in place, not only saves the finance team from spending huge amounts of time doing financial administration, it ensures that the data that is collected for statutory administration like tax returns is accurate.
For instance, an expense management platform that allows employees to upload expense claims easily to a cloud-based database, which can be viewed in real time by the company finance team. Having the ability to do this means that financial controllers can accurately monitor expenses throughout the year and spot any discrepancies quickly. The main advantage of this is that there will be no nasty surprises when preparing documents for things like tax returns.
As well as saving accountants’ time when it comes to preparing certain statutory documents in the short term, it allows them to have ‘bigger picture’ view of their organisation’s finances in the long run, allowing them to play a more strategic role in their company.
Making use of the support out there
Statutory accounts need to accurately reflect your company’s performance over the previous 12 months.
With that in mind, I’d recommend making best use of the expert knowledge out there when it comes to compiling statutory accounts. There’s no point struggling on, or trying to second guess how certain aspects of your company’s finances need to be reported when there’s so much support available.
Resources all accountants should access is the business section on the Government and ATO websites as this information goes some way in supporting accountants who are putting together statutory documentation. The beauty of these websites is that accountants themselves can find out what information they need to complete accurate returns.
In addition, I’d advise finance professionals to look at the white papers, videos and other resources that financial management companies offer for free. Again, all of these offer some insight on how to complete an accurate tax return.