This end of financial year checklist will guide you through the steps of wrapping up your books so you can approach the new financial year with a clear mind.

 

End of Financial Year Checklist

Before we proceed, check out these key dates:

  • 30 June 2022 – the end of the financial year 2021/2022
  • 1 July 2022 – the start of the financial year 2022/2023

Whether you’re working with an accountant or doing accounting by yourself, completing these tasks guarantees your compliance with Australian business regulations. At the same time, it empowers you to create more insightful decisions for the upcoming financial year.

Here’s a list of the tasks you and your bookkeeper need to complete during the end of the financial year (EOFY) in Australia.

  1. Bookkeeping
    • Organise your business and financial records
    • Reconcile your accounts
    • Run an inventory check
  2. Preparing and lodging tax returns
    • Declare your business income
    • Identify and claim tax-deductible expenses
    • Lodge your returns
    • Pay your taxes
  3. Planning for the new financial year
    • Review your finances
    • Map out your plans for the new financial year

 

1. Bookkeeping

  • Organise your business and financial records

The first step to preparing your end of financial year checklist is to gather a copy of your business and financial records for the year 2021/2022. These documents must show your business transactions, including the income and expenses you’ve incurred throughout the year. 

You must also include documentation on the government grants and COVID-19 business support payments you have availed. By doing so, you can submit accurate financial reports to the Australian Taxation Office (ATO) and maintain your good standing with them.

Some documents to include in your bookkeeping year-end checklist are:

    • A digital copy of your accounting records. If you’re using cloud accounting software, your accountant can access these records remotely, therefore saving you time from collating and sending such documents
    • Bank and credit card statements with details on the nature of each transaction, total interest received and paid, and the closing balance as at 30 June
    • Balance sheet and/or profit and loss (P&L) statement
    • Invoice lists and POS monthly reports
    • Documents on any government-related payments (e.g., grants, rebates, COVID-19 business support payments)
    • Accounts payable and accounts receivable statements
    • Stock value as at 30 June
    • List of all business assets. It must include complete details about the asset, including the date of purchase, price, information on repairs or maintenance, etc.
    • Details of your business insurance policies and total premiums paid
    • Other documents that may affect your tax liability

 

  • Reconcile your accounts

Ensure you have verified all your transactions for this financial year, so your ledger matches your bank statement. 

    • Invoices

Make sure you have invoiced your customers for all of your work or products you have sold this year. If your invoices are not up to date, be sure to bring them to date.

    • Collections

If any customers owe you money, ensure you collect this cash. We recommend sending past due statements and giving them a call to ensure you receive all of your money before the end of the year.

    • Payroll

Reconcile your payroll wages for the year and also prepare your payroll tax reconciliation for June. In this step, you want to ensure that your payroll tax liabilities are the same as your quarterly payroll tax returns.

    • Suppliers

Reconcile your accounts payable and bills in dispute and ensure you have accounted for all spending for the financial year.

    • Financials

This includes reviewing your profit and loss statements along with any loan payments you may have made during the financial year.  Also, review any assets you purchased or sold during the year and compile them into your end-of-year journal.

    • Run an inventory check

Depending on your accounting method, conducting an annual inventory review lets you see if you can claim additional deductions. In addition, it helps you separate your fast-moving inventory from the slow-moving ones. You can also identify any broken or missing items when you do an inventory check. This allows you to factor replacement and maintenance costs into your business budget.

 

2. Preparing and lodging tax returns

  • Declare your business income

The Australian tax system requires you to declare all income you receive from your business, investments and government payments. To make this process easier, the ATO has pre-filled most income information in your tax return when you lodge online.

See here the complete list of income you must declare based on your business type — sole trading, partnership or trust.

 

  • Identify and claim tax-deductible expenses

Claiming deductions for business expenses reduces the taxes you need to pay. However, make sure that the deductions you claim are eligible and properly claimed. Otherwise, it can be a liability to you during a tax audit.

To prevent this, consider working with a registered tax accountant to help you identify all eligible expenses and claim them according to Australian regulations.  

Read the complete list of tax deductions for small businesses here: What Tax Deductions to Claim Before the End of the Financial Year

 

  • Lodge your returns

You can lodge your tax returns through any of the following methods:

    • Online – Lodge your tax return with myTax via your myGov account.
    • Registered tax agent – A registered tax agent will lodge your returns to the ATO on your behalf.
    • Paper tax return – Lodge your tax return by mail. However, we encourage you to consider lodging using your myTax account first to make the process more convenient for you.

 

  • Pay your taxes

Pay your taxes before the deadline to avoid incurring penalties and interests. Visit the ATO page to learn the different methods of paying your taxes.

 

3. Planning for the new financial year

  • Review your finances

Look at the financial status of your business. Determine the targets you met and assess if your strategies worked. Use these insights to find out how you can do better in the next financial year.

 

  • Map out your plans for the new financial year

Set aside some time to set your goals for the next financial year. Prepare an action plan and figure out how you can implement your action items more effectively. With the help of an experienced accountant, you may also want to consider creating a budget and a cash flow forecast. Doing so will help you map your growth, mitigate any potential risks and ensure you can cover your business expenses throughout the year.

 

Prepare your bookkeeping year-end checklist

Each business will be different but this is the primary end of financial year checklist that applies to most companies.  If you are in need of bookkeeping services, we are here to help. ABJ Solutions provides the best bookkeeping services available for small and medium-sized businesses.

 

This article was first published on 14 May 2018 and updated on 23 May 2022 to include updated and more comprehensive information on preparing the EOFY bookkeeping checklist.