As we draw close to the end of another financial year, to assist you with your end of year close off we have provided a list of things to do before 31 March, on 31 March, and soon after 31 March.
Before 31 March 2018
Please review your Debtors Ledger for any bad debts. To claim a deduction for bad debts, the defaulting accounts MUST be written off your Debtors Ledger prior to the 31st of March 2018. It is not enough to actually reduce the amount of the debtors after balance date by the amount of estimated bad debts or unrecoverable amounts owing. In most accounting systems this means creating a credit note to the defaulting debtors account and coding it to the account code Bad Debts. If the original invoice included GST, then you can claim GST on the credit note.
Review the fixed asset register for items that have either been sold or scrapped during the year. The Fixed Asset schedule can be found in your previous years Financial Statements. If you need another copy, please contact our office. Please ensure you have narrated the entries coded to fixed assets with enough information for us to determine what has been purchased and have copies of invoices and any related financing readily available for us.
Repairs & Maintenance
It's a good time to review what you have coded to fixed assets and repairs and maintenance. All assets costing less than $500 (excl GST) may be claimed as an expense in the year of purchase, amounts greater than $500 (excl GST) could potentially be fixed assets. Please ensure you narrate these well in your accounting system for us to reduce queries on the job.
Structures & Financing
It may be time to consider an alternative structure or financing method for your business. Now is the time to consider Companies, LTC's and Trusts. If you are interested please contact us.
It may be appropriate to declare a dividend on or before 31 March. This may require top up income tax to be paid by 31 March 2018.
On 31 March 2018
Your stock (including work in progress) must be counted, recorded and valued at 31 March 2018. The trading stock rules require that you value it at the lower of cost, net realisable value or market selling value. Remember to exclude GST from your calculations and prepare a written record of your stocktake.
Stock value less than $10,000
- if your total gross income for the year is $1.3 million or less; and
- you can reasonably estimate your stock on hand at 31 March 2018 to be less than $10,000 (excl GST), you can choose not to value your closing stock or to include any change in value.
Holiday Pay & Wage Reports
Some payroll software systems do not allow for printing reports subsequent to 31st March, so ensure you have the reports printed as close to the end of the month as practical. This is particularly important for clients who accrue holiday pay outstanding at balance date.
Shortly after 31 March 2018
Year End Bank Reconciliations
If you have a computerised cashbook (Xero, MYOB etc.) , when you receive your bank statement for 31 March 2018, ensure all transactions are entered for the year, perform a bank reconciliation to this date being 31 March 2018 and print a hard copy for your records.
PAYE Payments Due 5th/20th April 2018
If you intend to pay out Directors Fees or additional bonus / top up salaries to either your employees or shareholder employees, you will need to pay to the IRD the PAYE content of the payments by the 5th or 20th of April 2018.
Dividend RWT Payments Due 20th April 2018
If you intend to declare dividends on 31 March 2018 you will need to pay the RWT content to the IRD by 20 April 2018.
Interest RWT Payments Due 20th April 2018
If you intend to pay interest on loan accounts at 31 March 2018 you will need to pay to the IRD the RWT content of the interest by 20 April 2018.
3rd Provisional Tax Instalment Due 7th May 2018 (for 31 March balance dates)
The final instalment of 2018 Provisional tax is not due till after the end of the year. While this may be good for cash-flow, it could have negative implications if you want to pay a dividend this year. If you think this affects you, and you would like us to review your imputation credit account or have any concerns, please contact us.
PREPARATION OF YOUR 2018 ANNUAL FINANCIAL STATEMENTS & INCOME TAX RETURNS
This year our Annual Checklists are available on our website at www.mcisaacs.co.nz under the "Financial Resources" tab, "Client Annual Checklists".
To simplify these checklists we have separated them out into the type of entity and provided specific ones if you have a rental property or mixed use assets.
- 2018 Business Checklist
- 2018 Individual Checklist
- 2018 Rental Checklist
- 2018 Mixed Use Holiday Home, Boat and Plane Checklist
These need to be completed and signed before we process your 2018 information. The accuracy and completeness of this information you provide has a direct influence on the time required to perform your assignment.
When you have compiled your financial records for us please remember to include the completed and signed Checklist(s). If you do not have access to our website and require a copy of the Checklists, please give us a call and we will post them out to you.