We’re approaching the end of February, which means it’s officially coming to the end of the tax and financial year. It’s a difficult time for accountants and businesses as admin piles up, and task lists get longer by the day. And to top it all off, it’s summer too.
The good news is that it doesn’t need to be a time drain. Research from Xero found that accountants can save up to 15 hours a week by using cloud accounting. That’s an average of 54 hours per month or 27 days – an entire annual holiday allowance, plus change. When respondents were asked what they would do with this spare time, of those who chose non-work related activities, 30% would spend more time with family, while 22% selected more time at the beach.
Together with Simon Magner, Xero partner and Director of Iridium Business Solutions, we’ve come up with a checklist to help accountants and small businesses prepare for this busy time.
Ensure your bookkeeping is up to date
The first thing you need to do is to make sure that your bookkeeping is accurate and up to date. You don’t want to be scrambling for the information that you need at the last minute – doing the legwork to make sure all the data is ready will pay off in dividends when you come to generating the year-end report.
Check employee data
Remember that your employee data needs to be up to date, and it isn’t up to your employees to sort this out. If it’s not your responsibility to collect this data, warn the relevant people about the year-end in advance. You’ll need to gather all information on payroll and bonuses, while also collecting all receipts for expenses.
Use technology to help you
Admin-heavy work like invoicing, transaction imports, reconciliation, payments – and more – are time-consuming. Even though software can do all these tasks, they’re often done manually by accountants and business owners – which means there is more room for human error. Xero research reflects this too – a quarter of accounting and finance professionals said they could work smarter if they spent fewer hours on administrative tasks.
Having up to date records in real time using cloud accounting software allows you to make better business decisions in terms of your tax position and avoid any costly mistakes.
Don’t let the leap year fool you
Even though 2020 is a leap year, the last working day is the 28th of February – so don’t think you can file your return on the 29th. On that note, don’t leave it until the 28th, either – just in case issues pop up at SARS on the last filing day of the tax year.
Use previous data to guide you
Remember to use past data to inform your current return. Last year’s assessed profit should be used as a starting point to determine the minimum tax you should be paying as a business. And remember, if you made an assessed loss in prior years you could deduct it against the current year’s profits.
When experienced accounting professionals and business owners have to spend time inputting data, processing reports, and scrutinising invoices, they can’t work on strategy, pursue new business or developing client relationships. If accountants want to spend some time away from their desks during tax season, they need to invest in the right processes. It will save them time, energy and costly mistakes.