Year End Accounts

With the end of the financial year fast approaching, we encourage you to keep in mind the following items which will assist us with preparing your accounts in due course.

  • Debtors/Creditors – Make a list of the amounts owed to you (invoiced) but not yet received and the amounts you owe but have yet to pay at the end of your financial year.
  • Holiday Pay – Keep a record of any holidays paid to staff within 63 days of balance date. These expenses, to the extent that they relate to holidays owing prior to balance date, can be claimed.
  • Bad Debts – Review your debtors and write off those you no longer expect to receive. To claim a tax deduction for bad debts, these need to have been written off prior to the end of your financial year. If queried by the IRD it is important that you have appropriate records to show that this has been done. Note that writing off a bad debt does not mean you have to stop trying to collect it but you must have taken all “reasonable” steps to collect it prior to writing off.
  • Stock on Hand – Complete a stock take on the last day of the financial year. Whilst some industries have special provisions for valuing stock, generally commercial stock is valued at the lower of cost or net realisable value (i.e. sale price). The stock values should be GST exclusive and you will need to have records to support the values used. Also note that if your total stock is under $10,000, an estimate of stock on hand is adequate. For farming clients, livestock tallies and bought-in feed on hand over $58,000 at the end of the year need to be recorded.
  • Timing – Consider the impact significant transactions might have on your profit for the year. For example, selling an asset after balance date rather than before might defer any depreciation recovered.

If you are at all unsure about any of the processes above, please do not hesitate to contact your client manager to discuss.