The new financial year is now upon us, and it is the perfect time for business owners to be focusing on tax and accounting procedures that include:
- Ensuring that your BAS lodgements and super guarantee (SG) contributions are accurate and up-to-date.
If your business does happen to be behind on its tax and BAS payments, ensure that payment arrangements have been entered into with the ATO and these arrangements are adhered to strictly.
- Update your payroll systems and spreadsheets for the following changes that apply from 1 July 2014:
- Increase in the medicare levy from 1.5% to 2%.
- Increase in the super guarantee rate from 9.25% to 9.5%.
- Introduction of the Temporary Budget Repair Levy which is to apply for 3 years for individuals with taxable incomes above $180,000.This in effect increases the top marginal tax rate by two percentage points.
- Reconcile payroll and provide 2014 PAYG Payment Summaries to your employees by Monday 14 July 2014. Also the 2014 PAYG Payment Summary Statement needs to be lodged with the ATO by Thursday 14 August 2014. Ensure that salary sacrifice superannuation contributions and certain reportable fringe benefits have been included on the PAYG Payment Summaries. Note that penalties may be imposed by the ATO where these and other documents are not lodged on time.
- Does your business operate in the building & construction industry? Does it pay contractors for building and construction services? If so, you will have to report those payments to the ATO on the taxable payments annual report by 21 July 2014.
- Back up your data file prior to rollover and ensure compliance with record-keeping requirements. The ATO requires businesses to keep records for at least five years. Contact us for more info on how to backup your data.
- Contact us to have us review the GST codes assigned to profit & loss and balance sheet items to ensure they are correct so that you are lodging accurate BAS’s.
- If your business carries stock, the stocktake of inventory should have been completed by 30 June 2014. Any unders/overs of stock quantities and spoilage identified from the stocktake process should be adjusted in the stock module as at 30 June 2014 to ensure it is reflected in the 2013/14 accounts.
- Where your business has substantial plant & equipment, the stocktake of fixed assets should be completed by 30 June 2014. Any adjustments required to the assets register identified in this stocktake including description, location, quantity and damage/obsolescence needs to be recorded in the assets module as at 30 June 2014 to ensure it is reflected in the 2013/14 accounts.
- Review your balance sheet and profit & loss statement to confirm:
- Bank accounts and loans are reconciled.
- All income, including cash sales, has been recorded
- Receivables and payables subsidiary ledgers are reconciled to the general ledger.
- GST and PAYG withholding accounts are reconciled to the June BAS.
- Wages in the profit & loss is reconciled to the PAYG Payment Summaries.
- Capital items such as plant & equipment purchases have not been expensed as repairs.
- Amounts in suspense have been allocated to the appropriate account.
- Personal expenses have not been claimed as business.
- Material differences to the prior year can be properly explained.
Planning for the 2014/15 year
Some steps that you can undertake to improve on the performance of the current year include:
- Preparing/updating your business plan to provide forward direction for the business.
- Update profit & loss and cash flow budgets for the next 12 months and compare actual to budget. Arrange credit facilities where expected cash shortages are to occur.
- Review financing arrangements and don’t be afraid to shop around for a better deal.
- Review insurances to ensure there is an adequate level of coverage.
- Reduce costs in areas identified as excessive in the current year.
- Implement new internal control systems to address weaknesses identified.
For more new financial year tips or to book in a tax planning meeting with us, contact us on 02 9299 7044 or via firstname.lastname@example.org.