Author: Harry Hoang | CEO of Tailored Accounts
With the End of Financial Year (EOFY) fast approaching, offices of accountants and bookkeepers are filled with the hustle and bustle of time-critical challenges. Some of you may wonder what makes EOFY an especially hectic time. This article will give you a behind the scenes look at EOFY preparation.
Having worked in the accounting industry for more than a decade, I consider EOFY preparation as an opportunity to put in extra effort to ensure accurate, up-to-date numbers as well as presentable reporting. These outputs are the results of, what I call, a magical touch on your books.
The following list articulates the main examples of “magical touches” we exert to ensure your books are in the best order:
1. The Year-End Payroll
During the financial year, we process 12 – 52 payrolls for each of our clients. At the end of each month or quarter, our team reports this payroll information to the Australian Taxation Office (ATO). In addition to the accurate reports regularly lodged to the ATO, payroll reconciliations at year-end take extra care and attention to ensure all requirements are met. Here are the core tasks that our team has been undertaking in the process of EOFY preparation:
- Final super payment runs must be done before 25th June each year to ensure the last super payment is eligible for a tax deduction in the current financial year. Final salary sacrifice payment runs must happen on or before the same date. These particular tasks will require a few extra hours of work during the EOFY period.
- Tailored Accounts will be preparing STP on behalf of our clients and submit them to the ATO. We will submit STP to the ATO by 14th August via STP enable software. Your payroll summary (used to be called payment summaries) will automatically show up in your MyGov ATO section.
- If you are managing your own payroll, you will also need to have STP ready for employees by 14th July and the ATO by 14th August.
2. The Last GST & BAS of the Financial Year
As you may be aware, April-June BAS is not due until 28th July in the next year. Regardless of the due date of BAS, our team finalises the last quarterly BAS before 14th July to reconcile balances between payslips and BAS. To prepare for the end of the year BAS, the assignments below must be carefully completed:
- Completing all reconciliation processes for the last quarter BAS will require half a day.
- Review all quarterly sets of BAS submitted during the financial year to reassure the integrity of your financial data since all adjustments need to be made in the final BAS. This task usually takes half a day.
3. The Final Review of all Other Accounts
After the big year-end reconciliation processes of Payroll and BAS, our team also reviews every single account in your Trial Balance prior to closing your books. If your business has 50 account codes, for instance, we will need to thoroughly go through all 50 of the accounts. To deal with the sheer volume, the Tailored Accounts team implemented a streamlined process to review every account.
Ultimately, the total hours of required effort tend to rely on a number of factors, such as the size of your books, your accounting software, and the maintenance status of your accounts.
For instance, a small business, with up to five employees and less than $500,000 turnover, would need three hours for the year-end payroll processes, three hours for finalising all sets of BAS, and another six hours for other EOFY tasks. An additional provision of three hours is required for assisting your tax agent or auditor. Accordingly, one-hundred small business clients can be translated into a budget for 1,500 hours (equivalent to 6.5 full-time staff) at a minimum for six weeks prior to EOFY. A hundred medium businesses would be an exponentially larger endeavour!
Now you know why accountants are always so busy at this time of the year.
Fortunately, at Tailored Accounts, we adopt the latest technology to minimise manual reconciliations. Thus, providing you with optimal savings in both time and cost during the EOFY period. With strong attention to detail, the Tailored Accounts team and I have always delivered neat, error-free and presentable reports to more than five-hundred clients since 2008. With EOFY approaching, this is an opportunity to set your financial reporting right by contacting Tailored Accounts today!