Make a checklist of the things you need to do to streamline your annual accounts. Here are some suggestions to start you off:
• Answer all questions in our questionnaire link here
• Make sure you have everything asked for in the questionnaire.
• Sign the completed questionnaire.
• Arrange for a stocktake to be done on 31st March (if needed)
• Count cash in the tills and petty cash at the end of the last working day.
• Work out money you have earned and not been paid as at the end of the financial year. If it’s earned but not invoiced, it must still be counted.
• Work out money you owe your creditors at balance date.
• If you have a high income (more than $179,030 after deducting expenses) make sure you’ve paid enough tax.
• Write off bad debts – see guidelines below.
GOT A BAD DEBT LOOMING?
Be quick and be persistent applies particularly to debt collection.
If you’re offered a cheque and you don’t like to suggest it might bounce, see if you can get two cheques for half each. Your debtor might have the funds to let $500 through but not $1000.
WRITE OFF THOSE BAD DEBTS
With year end fast approaching remember to review your debtors now.
If you think you’re not going to be paid, write off the amount. Don’t delay beyond balance date, because you can’t backdate a write-off.
Show evidence to confirm when you wrote off the bad debt. For example, if you type out your bills and keep copies as your record of what is owed to you, write on your copy something like “written off as a bad debt on . . . . . (write in the date)”. Initial the note, too.
IRD requires you to do everything reasonably possible to collect the money before you deem it a bad debt.
Once you have written off a debt as bad, you don’t have to stop trying to get the money. Sometimes you are lucky and get paid even though you had good reason to
believe it wouldn’t happen. That is a “bad debt recovered” and becomes income when you receive the money.
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