Things to do this month
With the end of the tax year approaching, check your systems and documentation now and plug any gaps. A good approach is to dig out the EOY checklist you got from us last year and use it identify any information you need to start gathering now. That way, you won’t be rushing frantically later when we need the information.
- Check your cashflow and tax position, using the tips in December Newsletter
- Get together with your team to make sure you cover everything needed if your business is closing over Christmas. Review your work site and equipment for safety and security. Back up your client and financial data on all IT systems and run any anti-virus updates.
- Let clients and suppliers know your close-down details or limited opening hours. Consider whether your office or website needs signage giving a contact number if the office will be unattended. Keep it general as you don’t want to flag too good an opportunity for thieves.
- Next month can be challenging for business. If you have a rush of Christmas orders or sales, you’ll have less time to deal with the load. Why not use what’s left of this month to make sure your financial information is as up-to-date as you can get it, so you can get the end-of-year picture as soon as possible after the Christmas rush?
- Your business plan is a document that should be kept current. You’re unlikely to have much time next month to review it, and there won’t be a lot of time when you return after Christmas before the new financial year starts. So why not look over your business plan now so it is at least partly revised when you return after the holidays?
- If you don’t have an office intranet, you can set one up to encourage your staff to make suggestions and give feedback. It will also facilitate project work, and can store useful templates, like leave application forms. It can be as basic as a shared Google Drive folder. Or you can get as detailed as a custom-designed system on SharePoint.
- If your business has a turnover of less than $5 million a year, IRD’s new option for managing provisional tax, the Accounting Income Method (AIM), will let you regularly calculate provisional tax – and GST – through approved accounting software. Why not get ready for this by contacting us to see if this will work for you.
- Are your records for rental income and expenses together for us to do your tax? One way of doing that is to get your hands on a good Rental Questionnaire template. Contact us if you would like one. Some rental situations can be complex, so talk to us if you’re unsure.
- If you’re not on top of insulation requirements for any rental property (see article above), make a note to get it done. In fact, with the weather improving, the workload for insulation contractors may be dropping, and that may get you a better deal.
- The end of this month marks the halfway point of the financial year. That will be a key time to lock in a picture of your cashflow, revenue, expenses and all financial information for the half year. Do it soon so you can respond promptly if there are problems.
Cashflow forecasting is important because if your business runs out of cash it won’t be able to operate. You now have one clear month before the third quarter to get the best possible clarity around cashflow. How often you forecast cashflow depends on the soundness of your business, although you really cannot do it too much. If your business is struggling, you should be forecasting and revising your cashflow every day.
Focus on cashflow now to:
- Identify potential shortfalls in cash balances in advance — like an “early warning system”
- Make sure your business can afford to pay suppliers and employees
- Spot problems with customer payments
- Have current information for stakeholders like banks.
If you would like to have a chat about your business cashflow, let us know.