EOFY, or the End of the Financial Year, is when you close the books. This year, the EOFY falls on a Sunday (June 30th, 2024), which can make things messy regarding your financial records.
The Perils of a Weekend EOFY
Here's the potential snag: some businesses close their accounting books on the Friday before the EOF, while others wait until Monday morning. This means invoices and credit notes sent Thursday or Friday might not reach your accounting system until next week. With Australia Post delays, you may find that your crucial invoices and credit notes aren't reflected in your records for quite a while. As a result, some companies' financial books will have figures different from your books for the EOFY. This mismatch can cause problems later during tax audits.
The ATO inspector will check your figures, cross-check them with your suppliers, and ask why they differ. Since the audit is generally done years after the event, it can be hard to justify your figures. You will be scrambling to explain the discrepancy. You do not need these headaches.
This is precisely the situation that happened to us. One company sent us a credit note on Friday, which we did not get until a few days after the EOFY. Another company reviewed our debts to them long after and then backdated them to the EOFY. Both of these cost us.
Taking Control
You must ensure you have something in writing from your suppliers justifying your EOFY figures. If you cannot get that, you must ensure that your POS and financial systems can provide the information to explain your figures.
- Try setting a deadline for receiving invoices and credit notes before EOFY.
- Chasing outstanding invoices/credit notes from suppliers.
- Make sure you get something in writing.
- Close your books a few days later if possible to get verified figures.
One big plus with our POS system compared to others is that you do not have to close the books at the EOFY, so you can keep processing and correcting them as information comes in.
