Don't Let Tax Season Sneak Up: EOY Financial Checklist for Tradies
Being ready for the end of the financial year should start on the 1st of April, if we’re being honest. However, it’s easy to let things slide! During the silly season especially, many trades business owners find themselves drowning in normal work, extra work, extracurricular social activities, and staff leave. It’s no wonder that bookkeeping tends to fall by the wayside.
The bad news is that by the time you’re through December and January, March is just around the corner. Staying on top of your finances over the summer means less of a mess at the end of the financial year.
You can thank us, and yourself, for the heads up when the time comes.
Need another reason to keep your books in order?
If avoiding March madness is not a good enough incentive to keep your books in good shape, we have a few more.
You’ll save money! Messy books often means you’re missing out on potential tax deductions and cost-saving opportunities. Tidy books provide a clear view of what you’re spending, where you’re spending it, and any opportunities to tighten things up.
You’ll get time back! Sure, getting your bookkeeping under control might be a big task, depending on the current state of it. But once you have an effective system in place, keeping on top of things is much easier and quicker. Of course, there’s always the option to outsource bookkeeping to an expert who’ll have those figures and columns and receipts shipshape far faster than you could do it yourself.
You’ll stress less. Feeling like your business finances are messy and out of control can wear away at your sanity and steal peace of mind. Feeling confident in your cashflow and knowing that everything is accounted for (and tax obligations are being met) is a weight off the shoulders of a business owner.
The end-of-year checklist you didn’t know you needed
We didn’t want to give you generic tips that AI could have written; we’re a very human, very NZ-based team with specific expertise in supporting Kiwi trades businesses. So we spoke to Terrena, bookkeeper and magician, to find out what EOY challenges she’s encountered with her clients and how you can overcome them in advance.
We’ll start with something very basic. Keep collecting the documents you need for your accounts. You should be doing this all year, don’t fall off the wagon even when December hits! This includes
-Receipts
-Invoices
-Any other relevant pieces of information. If in doubt, keep it (digitally is fine).
Track your expenses! In addition to the usual things like mileage, phones, materials, office overheads, etc, you’ll likely be dealing with party expenses over the festive seasons. Record, record, record so you don’t end up with an inflated income on which to pay tax.
Keep track of your cashflow, with extra considerations over the holiday period. Our bookkeeping wizard Terrena points out one thing that can throw many people off: those making bimonthly GST payments will likely end up with bills two months in a row. Oct/Nov GST is generally paid in January and Dec/Jan in February, so plan for two in quick succession. This, of course, comes on top of added entertainment expenses and staff leave!
Reconcile your accounts. You should be doing this all the time anyway. Make sure it’s regular so you’re not hunting around last minute when trying to get work done during the end-of-year busy season.
Make sure you find out—and WRITE DOWN—your clients’ cut-off times for December invoices. Often, it'll be earlier due to Christmas closedowns, so if you want to be paid promptly you need to remember and abide by these dates.
Check the annual leave balances of your employees early, so you can plan for likely scenarios. They won’t necessarily take all of their leave at once, but you should be prepared.
Ensure you’ve chased up your accountant to get your tax return from the previous FY filed, and pay any tax owed before the next one to get that weight off your shoulders.
Get experts on the case. It doesn’t have to mean committing to a new employee or even anything long-term. A few hours of bookkeeping outsourced to someone who knows the processes inside and out can take unimaginable amounts of stress and work off your plate.
Need help ticking things off your financial checklist? Book a 15-minute discovery call and let’s make it happen.
