Q&P's End of financial year good housekeeping tips
For all of you about to finish the financial year on 30/6/06, now is a good time for a little practical Accounts Office Housekeeping. According to Dave Bell, now is the right time to look at full financial year reporting, not so much from a general ledger point of view - because that is not usually closed immediately - but from a customer trading perspective.
And when you have all the information there is a need for management to review and understand exactly how the business has traded throughout the year.
In the first place, here's what every good accounts housekeeper should do:
- Generate a Debtors Aged Balance and review all with amounts above 60 days. Identify those where the company is no longer in business or where it is expected they may be deemed a Bad Debt. Liaise with management/your accountant to ensure that, if appropriate, invoices are credited or written off, this ensures the GST will be taken up in the current year BAS and may reduce tax liability.
- Review June Statements before they go out to clients and determine if discounts will be given for small underpayments, that all prepayments have been allocated apart from current month ones where work is not yet done, etc. Process any required transactions and then regenerate the Statement for that Debtor.
- Confirm all Creditors Statements reconcile with your system Balances and follow up those which do not. These need to be resolved in the current year to ensure that accurate actual costs against jobs are carried forward for WIP as at the end of year.
- Generate a Creditors Aged Balance and review all with amounts outside your usual payment terms. Identify where Credits are to be received and follow up.
- When reconciling Cash Book/s June 30 check for any unpresented Deposits and confirm correct. Check Unpresented Payments and follow up those long outstanding ones, for those over 12 months old determine action with management/accountant.
- Confirm the GST Accounts reconciled at the last BAS period, this means that any issues at 30/6/06 are within a single quarter (or month) and will be easier to track.
- Those companies handling Payroll inhouse as well as those outsourcing to bureaus should have reviewed all state/federal awards, employer and employee registered agreements, both collective and individual, and common law contract with employees to ensure they meet their employer requirements re WorkChoices. A timetable for any outstanding changes should be determined.
Management Review
After the above is done, it is time for management to look at:
- Annual trading reports reviewing by dollar and percentage the customers with the highest turnover of business.
- Review of Top 10 customers (as above) to look at percentage profit on jobs.
- Mark up percentage reviews, this is often related to the Days to Pay for a customer over the past 12 months and is a report available in Quote & Print and other packages.
- Generate financial WIP and Stock On Hand reporting as at 30/6/06 to have accurate figures for accountant if carried on Balance Sheet.
- Generate reporting for other KPI for management review.
For all of you about to finish the financial year on 30/6/06, now is a good time for a little practical Accounts Office Housekeeping. According to Dave Bell, now is the right time to look at full financial year reporting, not so much from a general ledger point of view - because that is not usually closed immediately - but from a customer trading perspective.