Understanding Financial Year-End as a Business Owner

As the financial year draws to a close, business owners need to finalise their financials, ensuring that everything is in order for tax submissions and compliance. But do you know exactly what your financials are for and how to balance your balance sheet? Here’s a breakdown of what financial year-end means and what comes next.

Why Financial Year-End Matters

Your financial year-end is a critical time for evaluating your business performance, preparing tax submissions, and ensuring compliance with financial regulations. Here’s why it matters:

• Tax Compliance: Submitting accurate financials ensures you meet tax obligations and avoid penalties.

• Investor & Stakeholder Reporting: If you have investors or lenders, they’ll require accurate year-end financial statements.

• Strategic Decision-Making: Reviewing financials helps you plan for the next year, identifying growth opportunities and cost-saving measures.

• Loan & Credit Applications: Banks and lenders often require year-end financial statements to assess creditworthiness.

Do You Know How to Balance Your Balance Sheet?

Your balance sheet provides a snapshot of your business’s financial health at year-end. Here’s what you need to check:

• Assets vs. Liabilities: Ensure your total assets match your total liabilities plus equity.

• Accounts Receivable & Payable: Verify outstanding invoices and payments to keep cash flow in check.

• Fixed Assets & Depreciation: Review and update your fixed assets register to account for depreciation.

• Inventory Valuation: Ensure inventory is correctly accounted for to avoid discrepancies in profit calculations.

Now That Financial Year-End is Over, What Next?

Once your financial year-end is complete, here are the next steps to keep your business on track:

1. Reconcile Accounts & Fix Any Discrepancies
   Double-check your financial records, ensuring that all transactions are correctly recorded. Perform reconciliations for bank accounts, supplier statements, and customer balances.

2. Update Your Fixed Assets Register
   Ensure your asset register is up to date, accounting for any new purchases, disposals, or depreciation.

3. Prepare Final Tax Returns
   Submit your final tax returns on time, making use of any deductions or allowances available to your business.

4. Plan for the Next Financial Year
   Use the insights from your financial reports to set budgets, improve cash flow management, and implement strategies for business growth.

5. Book a Financial Review Session
   If you need help analysing your financials or planning for the new year, speak to an advisory accountant to ensure you start on the right foot.

Need Expert Guidance? Rae & Associates Can Help

Our team at Rae & Associates specialises in year-end financial reviews, tax compliance, and business advisory services. If you need assistance balancing your balance sheet, preparing tax returns, or planning for the new financial year, we’ve got you covered.

Book a Consultation Today and get the expert financial support your business needs.