Seven Tips to Preparing For Your Tax Accountant

Another financial year is over and your business is ready to get its tax and accounting compliance work completed. Your accountant is an expert who can help you with both your compliance work as well as additional value-added services. Follow these Accounting tips to ensure that your accountant can provide you with the most efficient and effective service possible.

1. Keep good records 

If you only follow one tip, then follow this one. Keep good records. Your accountant can only work with the information that they have.

Record everything. File your receipts. Track diary records and notations of events, travel, work-related use of otherwise personal expenses, and costs that you can’t get receipts for.

If you’ve failed to do this through the year, unfortunately, it may mean you miss out on otherwise eligible deductions. Sit down now and work out if there is anything you can salvage. Go through receipts that are unclear. If you work from home keep a two-week record of how your home internet is used so you can justify a work-related claim. Most importantly don’t keep missing out, ask your accountant what you should be tracking and be prepared to track it going forward.

Remember that your accountant can only claim eligible deductions when there is appropriate evidence and justification to make the claims. They can only make effective business analysis and help with forward planning when your records give a clear indication of where the business has been.

2. Be organised and submit everything together

The more organised you are, the more efficiently your accountant can work. Ensure your accounts are all reconciled so that your accountant isn’t spending large amounts of time fixing up bookkeeping work.

Don’t send in your work bit by bit. This creates significantly more work for the accountant who has to sort through each piece, work out what’s still missing, ask and wait for further information, and make multiple recalculations as additional information is provided.

Missing or poorly organised information increases your accounting fees and increases the risk that you will miss out on otherwise legitimate tax deductions.

3. Have a clear list of queries

It’s great to have questions! Utilise your accountant’s expertise by having a clear list of what you need to ask them.

Highlight how any information that you are uncertain about has been treated so far. This helps ensure potential mistakes are easily found and addressed and ensures the accountant knows what instructions to provide so that similar transactions can be treated correctly going forward.

4. Be interested in your own business finances

Pay attention to your accountant’s explanations and queries. If you are disinterested, you are more likely to miss eligible deductions, overlook potential requirements, and miss out on a valuable opportunity to learn more about your own business.

5. End of Year Compliance

Before you head in to see your accountant make sure you are fulfilling all your obligations and requirements. For example:

• Ensure you have done a proper stocktake for the end of the year.
• If you use your car for work ensure your logbook has been properly and completely filled out AND that you take your odometer reading at the 30th of June.
• Review your debtors and make sure you write off any bad debts.
• Ensure you have paid all your staff obligations through the year. If you haven’t paid your superannuation through the year then you lose your ability to claim deductions for late superannuation, and you will be subject to penalties.

If you are ever in doubt about your obligations ensure you speak to your tax accountant as soon as possible- don’t wait for the end of the year for it to be sorted out as this may mean your business losses out.

6. Be consistent

There are numerous obligations that your business must meet. For example, fringe benefits tax, wages, PAYGW, superannuation, and GST.

The information that you are using to report on these obligations should match the information in your tax and accounting reports. Your accountant will reconcile the information they have with other reports you have made and the ATO is employing more and more sophisticated data matching methods to ensure that businesses are not making claims that are out of line with other lodgements.

Massive inconsistencies will create questions about the reliability and accuracy of your bookwork, which in turn will make it more difficult to ensure that your compliance work is completed effectively. In the worst case scenario, it could lead to fines and penalties for inaccurate reporting.

7. Get in early and take advantage of the accountant’s expertise for the next year

Once you are on top of all your information and well prepared to ensure you are getting the most effective and efficient compliance services, then you are ready for the next step.

Try to get in early so that your compliance work can be completed in a timely manner. This means it is early enough in the new tax year for your accountant can use this information to help with the current financial year. Budgeting, tax planning, improving bookkeeping work, and business analysis that can help you make more effective management decisions, are some of the key ways in which your accountant can provide future directed assistance.