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.

Today is the EOFY, the last day of the financial year. So it is the last day to review your bookkeeping. Then make some last-minute adjustments.

As a minimum, I would suggest you get these reports in order:

Sales reports

Stock Valuation (this may depend on when your stocktake is done)

Customers Outstanding Subagents Outstanding (if relevant)

Creditors Outstanding (if you do it from the point of sale software)

It would be best to consider what can be written off in the debts and stock to claim a tax deduction for this year. Otherwise, these will be profit this year.

Click here for a webinar on End of Financial year reporting from your point of sale software. It discusses in detail these reports.

I suggest that come the end of the financial year, you save a backup of your financial data for this year and store it somewhere safe, even though our system does not require it. Over the years in my experience, this has proved to be very handy in the future. I suggest you use a USB stick.

If you do not want to do this, run your financial reports and send them to your personal email accounts. These reports include:

Debitors
Creditors
Stock
Payroll reports

We need to be ready to hit the ground running as preparing a business for the End Of the Financial Year (EOFY) can be daunting.

As a minimum, you need to do the tax stuff, but while doing this, you can do the management reporting too. This can be time-consuming, but luckily much of the information required is built into your POS Software. Before you go to the accountant, it is worthwhile to go to this webinar to review what reports our Point of Sale Software can produce. This will give you a feel of what you can supply to the accountant.

Here's a checklist of reports that you will need.

Sales reports
Stock Valuation (you will need to do this after your stocktake)
Customers Outstanding
Creditors Outstanding (if you are running creditors)
Subagents Outstanding (use only if applicable)

Click here for a webinar on the End of the Financial year reporting. It discusses in detail what reports our system can produce. 

Although not required from our software, I do recommend that you do make a special End of Year Backup to store in case you need to refer to it. The 30/of June this year is Thursday.

For most of us, the End of the Financial Year (EOFY) is on the 30 June. For most businesses, it is a significant time. The immediate problem is super which has to be in by the 28 July. Then what we need to do is prepare by 31 October. If you do not use an accountant, you must lodge to the ATO by then but you often get some more time often with an accountant.

Here are some tips for now:

1) Make an EOFY sale. Get rid of as much stock as you can. Useless stock, if kept, generally goes into the stock figure at a wholesale value. That will increase your profit.

2) Review your debtors and creditors. Be careful here as if debts that need to be written off are not written off, it increases your profit. If creditors are written off, it increases your profits. As such most people write off the debtor now and the next financial year the creditor.

3) Review your records; are they up to scratch? If it is not, you can have with the ATO a real problem. I have seen problems with people whose POS systems has errors with the ATO.

4) Start planning a date for your stocktake. Although it is not an ATO rule, it is a valuable method of stock control. It's the best way of determining what stock has been lost to theft, spoilage or taken for personal use. I recommend that all businesses do a stocktake at least once a year. Also, without one, you may have a dispute with the ATO over your stock holding.

Good preparation is the key to stocktaking as it is a lengthy and often expensive operation. Typically a shop is looking at four (4) days of work.

We will be doing webinars to help you prepare soon for the EOFY.

"By failing to prepare, you are preparing to fail." — Benjamin Franklin.