With EOY (end of financial year) looming, here is what you need to know
The End Of Financial Year is always such a busy time with a LOT to think about as a business owner. We have share some important things for to consider as a reminder:
If you have a Limited Liability Company and there are retained earnings in the Company, you may want to look at paying out a dividend this year (prior to the potential personal tax rate increase). There is some urgency around this, as it will all need to be dealt with and the Dividend Withholding Tax paid to Inland Revenue by 20th April. If you have funds in your Statement of Equity report in your annual accounts for last years accounts, talk to us or your accountant immediately.
Stock on hand
Taking stock of what stock you have on hand is super important as these figures are required for your financial accounts at 31 March. A stock count and is usually what is required to determine the value of this stock on hand (the GST exclusive cost of this stock).
Work in progress
Work in progress must be reported in your accounts. So you may as well get those jobs finished and billed out so you can get paid.
Invoices dated in March are included in your income for the year even if you don’t get paid until April (accounts are processed on an accrual basis, not a cash basis). If not billed until April, that income is included in the next financial year.
Shareholder Current Accounts (Companies)
Check that your Shareholder Current Accounts are not in the red, and if they are, that the profit in the business is higher than the balance of the account (so a shareholder salary will put it back in the black). Negative Shareholder Current Accounts (meaning the company has ‘loaned’ you that money) incur interest which then becomes income within the Company. Check with your accountant if you have any concerns or would like this looked at PRIOR to 31 March.
Minimum Wage increase
The minimum wage has increased to $20 per hour, so any payment for work performed by employees from 1 April 2021 must increase to $20 per hour.
If in doubt, get advice from the experts helping you with your business. You can contact us here.