End of financial year accounts and income tax returns are a necessary part of being in business, however it can be quite costly to have them prepared.
We can take your bookkeeping to the next level by undertaking a large amount of the initial work that your Accountant would do, including the preparation of an End of Year pack to provide to your Accountant:
- fully reconciled data file,
- Balance Sheet and Profit & Loss statement with referenced work papers,
- BAS reconciliation report,
- summary of prepayments, and
- notes to your Accountant to flag areas for their specific review.
All work papers can be provided in electronic or hard copy to meet your Accountant’s needs.
We can even liaise with your Accountant in relation to any queries they may have regarding your data during the accounts and income tax return preparation process.
What does the End of Financial Year Package include?
At the end of a financial year, we will supply to your Accountant an End of Financial Year Package. This package is designed to assist your Accountant with the year-end compliance tasks. It is normally provided in an electronic format but can be printed in hard copy where required by your Accountant. It sets out for your Accountant a simple traffic light system advising of the areas that we have considered on your behalf and those that we felt are best dealt with your Accountant. There are a set of instructions included in the End of Financial Year Package advising your Accountant how to navigate it and a Master Checklist that identifies the areas considered and any work papers that we have prepared for your Accountant’s review.
Upon completion of the year-end compliance work, we would request your Accountant forward to us any adjusting journals to process so that the your accounts and the final accounts are in alignment. In addition, we seek any feedback from your Accountant in relation to the End of Financial Year Package contents to determine if any further information is to be supplied in the future, or highlight where we have incorrectly dealt with a transaction and work together to improve your business’ record keeping.
Benefits of an End of Financial Year Package
If we consider the end of financial year accounts preparation and subsequent tax return, the typical situation would be as follows:The bookkeeper spends a large amount of time reconciling bank accounts and other finance related loans, reviews debtors and enquires into negative balances or possibly even writes off bad debts, reviews creditors and enquires into negative balances or possibly discusses with the client accounts that have remained unpaid for a significant period of time, reconciles GST control accounts back to the BAS statements that have been lodged, reconciles wages to the annual PAYG summary, considers a number of key profit and loss accounts to ensure accuracy (e.g. repairs and maintenance to check for capital expenditure, etc). Satisfied that the accounts are in good order the bookkeeper or the client then sends to the accountant a single MYOB or QuickBooks file……. typically not accompanied by any form of workpapers……. and the bookkeeper duly charges the client for the hard efforts of getting the file in order for the accountant.The accountant, on receipt of the software file from the bookkeeper or client……then proceeds to spend a large amount of time (typically at significantly higher cost) on reconciling bank accounts and other finance related loans, reviews debtors and enquires with the client whether any of them are considered bad debts, reviews creditors and discusses with the client accounts that have remained unpaid for a significant period of time, reconciles GST control accounts back to the BAS statements that have been lodged, reconciles wages to the annual PAYG summary, considers a number of key profit and loss accounts to ensure accuracy (e.g. repairs and maintenance to check for capital expenditure, etc). The accountant may then consider additional items such as Division 7A Loans, dividends to be paid, Small Business Rules, depreciation connotations, etc. Satisfied that the accounts are complete and in good order, the accountant proceeds with finalisation of the accounts, preparation of the tax return and any adjusting journal. Typically, bound reports and tax return are then sent to the client with a fee for the hard efforts of getting the accounts in order and completing the tax return.So, in essence, the client in many instances is paying twice for very similar services provided by the bookkeeper and then the accountant to essentially do 40 to 50 percent of the same work. Accountants and bookkeepers should be considering the role they play in the client’s affairs and working together to produce the most efficient and effective outcome