How can I prepare for End Of Financial Year?

In the last few days of March and the following weeks, there are some steps you can take to prepare for when you receive your Annual Accounts questionnaire from your accountant.


Bank Transactions

Have you coded all your transactions?

Make sure you code and account for all of your bank transactions for the year. This should be done on a regular basis anyway, but it’s a good opportunity to be certain all of your data is tidy and ready for processing.

If you aren’t sure on something, you can utilise the Queries box on the Xero bank rec page to ask your advisor for help.

If you don’t use Xero or some other electronic means of collating your data, then ensure you have your business bank statements printed and written on as to what the transactions relate to.

If you need help or advice, let us know.


Bank Statements

Download copies of bank statements as at 31 March

It’s important to verify that the bank balances shown in your accounting software matches to the balances shown on your bank statements, so make sure you either download a copy of the bank statement/s showing the closing balance of the business bank accounts as at 31 March, or alternatively do a screen shot of it – the closing balance is the important part!


Loan Statements

Do you have any loans the business is paying for?

In order to claim the correct interest expense for the year, your accountant will need copies of all Loan Statements for the full transactional period of 01 April to 31 March, showing the interest and principal portion of the loan transactions for the year.  Some banks provide a summary of this, and some don’t.  So have a look for this.


COVID Subsidies & Payments Received

Have you received Government support in the past year?

Some support payments and subsidies grants offered by the government need to be accounted for in different ways, so it’s important you have kept all records relating to all applications made during the financial year.

  • How many staff were included in your application/s, and did you record the names of the staff included?
  • Did you receive any Resurgence Support Payments?
  • Do you have record of how you calculated your revenue to meet the relevant eligibility criteria?
  • Did you apply for support under your company entity or yourself as an individual?

You need to be able to verify the income received and who has received it.

Petty Cash & Cash on Hand

Does your business have a Petty Cash fund or receive Cash payments from customers?

Some businesses have a Petty Cash fund for incidental purchases, such as rubbish bags for the office or milk for the staff fridge. If you have a Petty Cash fund, now is a good time to make sure you have all receipt copies and you know how exactly how much money is in the fund as at 31 March. You should also enter all of these expenses into your accounting software or provide them to your accountant.

If you receive cash payments from customers and can’t make it to the bank to deposit the funds before 1 April, then make sure you have records of how much cash you have received, who it was received from and what it was for.

Accountants will be asking about any cash payments received from customers but not banked during the year, so we can account for it accordingly.


Debtors (money owed to you)

Have you sent out all your Sales Invoices?

If you have terms of trade that allow your customers to pay following issue of sales invoices (such as 7 day or 20th following terms), make sure you have sent all your invoices out to your customers up to and including 31 March so your income for the year is reported correctly.

A list of money owing to you will need to be provided to your accountant (if not processed within software that your accountant can access like Xero or MYOB)


Creditors (money you owe)

Do you pay your suppliers after receiving their invoices?

Similar to the above, you might have terms of trade with your suppliers that allows you to pay their bills after you have received the invoice (such as 20th following terms). Make sure you collect and save all supplier statements you receive as at 31 March, and that the closing balances of these supplier accounts match to the Aged Payable report in your accounting software.  Or if not using software, provide these statements to your accountant at year end so they can include those costs in your returns. 


Inventory / Stock

Have you physically counted your stock?

Trading stock on hand at year end must be valued.  Provisions for obsolete stock or stock write downs are not generally allowed as tax deductions.  Therefore prior to year end it is important to perform a stock take and to ensure that all obsolete stock is physically disposed of or is valued using one of the prescribed methods.


Work in Progress

Do you have costs you have paid for, but haven’t invoiced your customers for yet?

Some businesses may incur expenses and costs before charging a progress or payment claim out to their customer/s. While this is usually fine, around year end if sales income is invoiced in the next financial period then you could be over inflating your Purchases for the year prior.

Make sure you have a clear record of where projects are, what costs have been incurred on the project to date and what sales invoices have been issued.

If you need help with this, let us know!


Bad Debts

Have you written off all debts that you consider are ‘bad’?

Unpaid Sales Invoices should be reviewed and actually written off in your debtor ledger prior to 31 March so that you can claim it as an expense in your annual accounts. A debt is considered “bad” if a reasonable and prudent business person would be of the view it is unlikely that the debt will be paid. If you need help with collecting old debts, let us know and we put you in touch with a great contact who specialises in this field.


Employee Wages and Leave

Employee related expenses (leave and bonus provisions)

Your accountant must also reconcile your payroll processing software to your accounting software, so make sure you save a copy of your employee information for the full tax year.  That includes gross earnings and Kiwisaver employer contributions (including ESCT).

An employer can obtain a deduction for employee-related expenses that are owing at year-end (e.g. holiday pay, bonuses, long-service leave), providing payment is made within 63 days after year-end. Therefore, if you have a 31 March balance date, a deduction is permitted if any of the payments above are made on or before 2 June.

Did you know…. 

You can upload documents and information to Xero Files!

Interest Income

Did you receive Interest Income during the year?

This will likely be credited to your bank accounts, term deposit investment accounts, or KiwiSaver. Make sure you save a copy of all Resident Withholding Tax certificates you receive ready to pass onto your accountant (these start getting sent out around May/June).


Higher or Additional Income

Is your income significantly higher than the previous year, or have you received income additional to what you received last year?

Have you received COVID-19 Wage Subsidies or Income?

Your accountant (tax agent) must prepare your tax return to include all income received from all sources, so it’s important to let them know if you have pivoted your business during the year and are receiving additional streams of revenue.

This can impact on your potential tax position, so it’s important to let your accountant know as soon as you can so we can provide advice on how this might affect your tax situation.

You will also be asked if you have applied for and received any COVID-19 wage subsidies or support payments.


Fixed Assets

Assets no longer used in the business

Are you still using all of your fixed assets? Have some been broken, retired, or replaced?

Alongside your stocktake is a good opportunity to review your fixed asset register (list) to see if everything is included that should be and remove all assets that shouldn’t be on the register anymore.

Purchases of new assets

If you have purchased new assets or equipment, you are able to capitalise purchases over $1,000+GST. Make sure you upload all of your receipts for buying new assets to the transaction or your Xero Files folder, or provide these to your accountant at year end.



Did you purchase business liability or indemnity insurance?

Make sure you upload a copy of the invoice and policy information to the transaction in Xero or to Xero Files or provide to your accountant.



You can claim tax deductions from Donations – if you have the receipts

By providing all the copies of any Donations you have made during the year, you could be eligible for a Tax Credit. This includes church tithes, but only if you get receipts stating the amount donated and the date the relate to, and the providers are registered charities.


Home Office

Did you know you could claim a portion of your Home Office expenses?

For businesses without a commercial premises, you will likely be able to claim a portion of your home office expenses for business related use.

Be sure to save copies of all your Power, Rates, Home Phone & Broadband, House & Contents Insurance, and any other relevant expenses so your accountant can calculate a home office claim.  You will have to provide measurements for this of your property and the portion used directly for business purposes.


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