The 31st of March 2020 is rapidly approaching. Now is a good time to think about getting organised for your 2020/2021 annual accounts and make sure your debtors are correct for the 31st March 2020.
- If you have bad debts, write them off before you get to 31 March or you'll have to include the amount owing to you in your sales for the year.
- If you have invoicing to do in April for work done in March, remember these sales belong to the past financial year and must be included in your accounts receivable (sundry debtors). We find some professionals, particularly if they have only one invoice to issue, overlook this.
- If you have to count stock, think about how you can minimize the effort at balance date. Can you get rid of obsolete stock? Have you organised people to count the stock?
- It's unlikely your stock take can be done after you close for business on the last day of the financial year and before you reopen the next day. You will, therefore, need to take a record of transactions occurring after the stock take and before the year end and deduct these from the stock take. If your stocktake occurs after balance date, you will need to keep a record of sales from balance date until stock is counted and add these back to stock. If any deliveries occur around stocktaking time, you may also have to adjust for these. Some people refuse to accept deliveries at such a time, to keep things as simple as possible.
- Money owing by you at the end of the year (accounts payable or sundry creditors) needs to be listed so we can claim the expenditure for tax purposes. Some accounts, such as power, are easily overlooked.
- The easiest way of getting this list is to go through all your April payments and decide which ones relate to the previous financial year.
- It might be a good idea to get some maintenance work done before the end of the year, so you can get a tax deduction for it.
- Some people think if they change their motor vehicle before balance date, it could save tax. It's probably better to make your decision based on good business rather than on tax. If you're going to change the vehicle shortly, have a look at the book value you would anticipate at 31 March 2020 and compare this with the market value. If you’re going to make a loss, change your vehicle before balance date. If a profit, you can defer the tax for a year by changing the vehicle after balance date.
- If you have an investment in a PIE, you will need to provide your PIR, (prescribed investor rate), which is your tax rate. You get this rate by looking at your income for the previous financial year and your income for the current year.