March 31 is looming and now is the time to tidy up any loose ends so your accounts are ready for us come April. We’ve put together the following tips to help you out:
Write off bad debts now
It is not permitted to backdate a claim for a bad deft write-off performed after the balance date. Leave a trail of evidence of when you performed the write-off. If your business is very small and you control your debtors by keeping a file of copies of unpaid invoices, write on the copy “written off on …… (date)” and add your signature.
Note your odometer reading on 31 March
If you use a kilometre rate to claim for car running expenses, put a reminder in a place where you will not miss it to get an odometer reading on the 31st.
Did you buy multiple small assets?
Small assets costing $1000 or less can be treated as expenses. If you buy more than one at the same time and they have the same depreciation rate, you need to add the amounts together for the purposes of the threshold.
For the bigger income earners
If you pay $60,000 or more tax per year, consider whether your income has risen significantly. If this is the case, you could save yourself Use of Money Interest, charged at 7 percent, by increasing your third installment of provisional tax (7 May 2022 for March balance dates). You will hit the $60,000 threshold at $204,820 of income, assuming no income is taxed at the source.
If you keep logbooks, check your vehicle use
You are required to take a fresh three-month sample every three years. However, if the proportion of your business use has risen you can take a new sample at any time.
Organise your stock for stocktake
All stock will need to be valued. If a line won’t sell, you are entitled to value it at market value so long as you can show how you arrived at market value. It might be better to get rid of it in advance of the balance date.
Consider any maintenance undertaken
Any maintenance carried out and incurred before the balance date will normally be an expense so long as it does not add value to an asset, but rather brings it back up to standard.