GET SORTED NOW FOR A SMOOTH YEAR END

REVIEW YOUR DEBTORS
To be deductible, bad debts need to be written off before the end of the financial year, and to write off the debt you must have taken reasonable steps to attempt to recover the amount owing. Review your debtors and physically write off any bad debts before you close off your accounts receivable ledger for the 31 March. However none of the above actions prevent you from continuing to try to collect the debt.

DON’T FORGET STOCK TAKE
Many businesses carry some form of stock or work in progress, so a stock take on March 31 will be necessary. Your stock and work and progress figures need to be supported by appropriate documentation. Where services are involved, a summary of time records of work in progress should be provided. Please note that some industries have special provisions and you should contact your advisor if you think this may apply to you. To claim a deduction for obsoletes or slow moving stock, it should be disposed of before March 31. Taxpayers with turnover of less than $1.3 million can use the value of their opening stock as the value of closing stock, providing their closing stock is reasonably estimated to be worth less than $5,000 (this is to increase in future years to $10,000).

HOLIDAY PAY/BONUSES
Keep a record of all staff holidays taken within 63 of your balance date as any holidays paid within these 63 days are a deductable expense. If staff bonuses are to be deductible in the current year the amount and commitment must be decided before balance date and paid within 63 days of balance date.

FIXED ASSETS
Review your fixed asset schedule. Are there any fixed assets that have been scrapped? You could claim a deduction for their remaining adjusted tax value. You no longer have to apply to the IRD to write off these assets, so long as you or an associate do not intend to use them for a business purpose in the future; disposal would cost more than they were worth; and they are not buildings depreciated by the pooling method.

SALES AND PURCHASES
Examine significant intended sales and purchases to see which side of the balance date they should be made, that is assessable/deductible this year or the next.

EXPENSES PAID IN ADVANCE
A number of items paid in advance are tax deductible in the year they are paid – for example stationery, magazine subscriptions, postage, courier tickets and road user charges. There is no ceiling on the cost of these being claimed but prepaid advertising does have a ceiling of $12,000 and it must be within six months of balance date. The same applies to prepaid travel.

QUALIFYING COMPANIES
Elections for existing companies to enter the Qualifying Company and/or Loss Attributing Qualifying Company regime must be in place by March 31. Similarly, the paperwork which follows any decision to exit these regimes must also be with the IRD by March 31. If your company has had a change in shareholding, the shareholders may need to re-elect within 63 days of the shareholder change in order to stay in the regime. If you have incorporated a company, elections apply from the beginning of the first income year, provided the IRD receives the election form within the time required to file the company’s first tax return.

RECORD KEEPING
You should aim to tidy up any loose ends in your accounting system before year end. Remember to place all the important documentation such as sale and purchase agreements, loan statements, interest and dividend certificates in a safe place as you receive them – your annual folder is a great place. Devise a record keeping system that works for you but prevents vital information being lost or misplaced.

ANNUAL ACCOUNTING
Review and complete any questionnaire your advisor may send you. If these are carefully filled out and completed it helps to make the advisors job easier and more efficient when they prepare your annual accounts. The less time spent on your annual accounts means your accountancy bill is less.