It is almost that time of year again! Preparing your books for accountants is an important step to ensure that your financials are accurate, organized, and ready for tax filing. As a small business owner, here are some key actions you can take to get your books in order.
1. Organize Financial Documents
Make sure all financial documents are well-organized and accessible. This includes:
- Bank statements
- Receipts for expenses – Hubdoc is a great option that is free with Xero and acts as an online filing cabinet throughout the year by taking photos of receipts as you go, or emailing it through.
- Invoices (both issued and received)
- Loan and credit card statements
- Payroll records
- Superannuation records (if applicable)
- Previous tax returns or financial reports
2. Reconcile Bank Accounts
Make sure that your bank and credit card accounts are fully reconciled. Check your bank statements against Xero to make sure everything matches up. This helps identify any discrepancies early on.
3. Review and Categorize Expenses
Go through your expenses for the year and make sure they are properly categorized (e.g., office supplies, marketing, motor vehicle etc). This makes it easier for your accountant to identify potential tax deductions and ensure compliance with relevant tax rules.
4. Prepare Payroll and Employee Records
Ensure all payroll information is up to date, including wages, deductions, bonuses, leave balances and any other employee-related expenses.
5. Ensure Your Invoicing is Up to Date
Check that all your invoices for the year are accounted for and reflect accurate amounts. If any invoices are overdue, follow up with your clients to ensure payments are made before the year ends.
Tip – Xero has built in email reminders
6. Review Your Accounts Payable
Ensure all outstanding bills and invoices are accounted for. If there are any unpaid debts, settle them or make sure you’ve made arrangements with your suppliers.
7. Inventory Check
If your business involves inventory, perform a stocktake and ensure that inventory records are accurate. Report any discrepancies and adjust your records accordingly to reflect the actual stock.
9. Keep Track of Tax Deductions
Review your expenses for any possible tax-deductible items, such as business-related travel, meals, equipment, or home office expenses. Be sure to have all receipts/ invoices in hudoc
If you don’t have the time to manage your books, We are here to help get your books in order!
By taking these steps, you’ll save time, reduce stress, and make it easier for your accountant to accurately prepare your financial statements and taxes. This also ensures you’re compliance with regulations and helps your business run smoothly year after year.
Get in touch to find out how we can help you courtney@tos.co.nz