Make Year-end Painless
Make year-end painless
Your bookkeeping blueprint
Did you miss the deadline for filing your tax return? With the new financial year underway, it's a good time to take a fresh approach to your bookkeeping practices and make it easier for your accountant to efficiently do their year-end work and filing. Let's dive into some key strategies to avoid that last minute scramble and improve your financial management in the year ahead.
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First and foremost, investing in a robust financial management system like Xero can be a game-changer for your business. These platforms offer intuitive interfaces and powerful features that simplify bookkeeping tasks, from invoicing to expense tracking.
Technology lets you automate mundane tasks so you can focus on growing your business.
Stay on top of paperwork
Keeping your financial records up to date is crucial for maintaining accuracy and compliance. Be diligent about recording all financial transactions and attaching relevant documents and receipts.
Project management software or tools like Hubdoc can help streamline this process, ensuring that nothing falls through the cracks.
Trim the fat
Reviewing your overhead costs is another important step in optimising your financial performance. To maintain profitability, make sure your overheads are being properly recovered in your Preliminary & General items for building projects and built into your regular service charges for other trades.
Take a fine-tooth comb to your expenses and cut out anything that is obsolete or unnecessary.
Know your numbers
Make it a habit to regularly review your financial reports, such as your monthly profit and loss statement (P&L). It’s essential for making informed decisions and staying ahead of the game.
Engaging an accountant to provide deeper insights on a quarterly basis can provide valuable guidance and help identify areas for improvement.
use the bucket system
Consider setting up separate bank accounts for taxes, GST, PAYE and profit to better manage your finances. This way you’ll always have funds set aside to meet your financial obligations as they fall due, giving you peace of mind and avoiding any last-minute scrambling.
Put aside money for taxes as you go to ensure these costs are covered and avoid any last-minute crises.
By staying proactive and implementing these essential practices you can improve your financial management, stay on the right side of Inland Revenue and set your business up for success in the new financial year and beyond.
Amanda is a regular contributor to Inhouse
Published bi-monthly in print and online, InHouse is the official magazine for NZ Certified Builders.
This article featured in the June/July 2024 issue.
