The end of the financial year is a busy time for anyone working in the finance industry. While your workload may increase drastically, it’s still important to pay attention to the details and make sure you’ve completed your compliance obligations. You may choose to hire someone to help you but you’re still ultimately responsible.
Fortunately, you still have a couple of months to get things in order. Taking action now, in the lead-up to 30 June, will make life far easier for you when it comes to crunch time.
We’ve put together a set of end of financial year compliance tips that will help you do your compliance the right way.
Start planning now to avoid being short of time later down the track. Of course, there’ll be some things that you need to still do now, but see if you can delegate them to anyone or even postpone them. If you can’t, then finish them as early as possible so you’re free to concentrate on your compliance.
You may also need information from other stakeholders, so it’s a good time to let them know sooner rather than later. You don’t want to be held up because you’re waiting on other departments to finalise their paperwork.
Other things you can do to get ahead of the crunch include:
It’s important that you’re aware of all the reporting deadlines for your business. These are so critical that it’s worth printing them out and sticking them somewhere you can see them regularly. They include:
Scheduling in these tasks well ahead of time will minimise your chance of being subject to compliance action or hit with a penalty.
Your compliance obligations will vary depending on whether you’re a small or large proprietary company or a public company.
A large proprietary company (one with over $25 million in turnover, $12.5 million in assets and/or 50 employees) must prepare and lodge a financial report and a directors’ report for each financial year. The accounts must be audited unless you have an exemption from the Australian Securities and Investments Commission (ASIC). Some small proprietary companies must also lodge a financial report, so check with ASIC or an expert if you’re unsure.
Disclosing entities and registered managed investment schemes must lodge their financial reports within three months of the end of the financial year, as opposed to four months for other companies.
Every business needs to prepare a profit and loss statement at the end of the financial year. This includes all income received during the year, as well as all the expenses you have incurred.
You can start preparing your profit and loss statement now, although you may need to use estimated figures for some items. This will make your task faster at 30 June, when you can just revise the figures rather than starting from scratch.
Your expenses may include:
On 9 May 2017, the Federal Government extended the instant asset write-off provision for small businesses. If your turnover is less than $10 million, you can deduct the full cost of most depreciating assets in the year that they were bought. This only applies until 30 June 2018 and includes assets that cost $20,000 or less.
If your business buys or sells stock, you may need to do a stocktake as part of your end of financial year compliance. This applies if your business has an annual income of over $10 million, or your turnover is under $10 million but your inventory level has changed by more than $5,000 since the end of the 2017 financial year. In the latter case, a reasonable estimate will do.
The tax laws change every year, so once the rush of this year’s company compliance is over, schedule in time to make sure you’re across any changes. You may need to alter how your records are kept or make sure you understand the new company compliance regulations. If you understand upcoming changes now, you can get ahead of the game and be set up for the next financial year.
If you need help with your end of financial year compliance, get in touch with CCASA. We specialise in company compliance and will be able to give you advice on your obligations or take the load off your shoulders so you can focus on helping your clients and running a great business.
This information is general in nature and we recommend that you seek legal and/or accounting advice to make the best decisions for your business.