Prepping for the tax year - it's about as mundane a task as a business can perform. Or at least, the old way was.
Having to complete a series of entirely necessary but ultimately dull tasks just before the end of the tax year that will allow the accountants to "work their magic" is something that accounting software such as Xero has made a thing of the past for many businesses.
Cloud accounting software sends all your basic financial information straight to the tax office in real-time: the basic tax and compliance aspect of an accountant's job is being superseded by AI and automation.
Prepping for the tax year checklist
Where does that leave prepping for the tax year then? Well, there remains a basic checklist of tasks a business must complete.
This includes, among other things:
- Bank statements or a screenshot of closing bank balances at balance date.
- Confirmation that your Xero is reconciled up to balance date.
- Confirmation you've reviewed your debtors' ledger and all are still recoverable.
- Invoices and/or confirmation of period of any insurance payments.
- Invoices and/or nature of any legal expenses incurred.
- Confirmation that no expenses relate to the acquisition of a capital asset or the
- improvement of an existing asset.
- Details of any transactions you were unsure of how to treat during the year.
- Reconcile and analyse your credit cards, if not already done via Xero (which they should be!).
- Details of any business funds or assets used or appropriated privately during the year.
- Notification of any new investments.
However, these aren't things businesses should be doing just at the tax year's end. This should simply be business as usual, if not a daily then certainly a monthly occurrence. After all, cloud accounting software makes this easy - it's supplying real-time information on the state of your business now, not where it was a year ago.
Where does that leave accountants?
It won't be long before all businesses, no matter the size, are demanding more of a value-add from accountants than what they're currently giving. It shouldn't just be up to the accountant to compile the figures - that's Xero's job.
The accountant's role is now to bring those figures to life. They need to help businesses see beyond the numbers, into the better business decisions that lie beneath them. Accountants will no longer be accountants - instead, they will become true business advisers and sounding boards. They can use the real-time information provided by accounting software to (among other things) confirm business strategy, recalibrate action plans to better align with goals, confirm KPIs for the year, prepare budgets and ensure businesses are using the right software and add-ons.
BDODrive has been developed to do just this. Using a combination of professional and technological resources, your BDO adviser will learn exactly where your business is at today, to help you achieve the goals you want to achieve tomorrow.
Providing tailored solutions that take your business' individual circumstances into account, we'll help you succeed, whatever you deem that success to look like.
And if you're really worried about tax and compliance, our BDODrive business planning kit has a range of tools to help with this.
Contact BDO New Zealand today for more information on what BDODrive can do for you.