(08) 9071 2173
Share
In the current economic climate, the importance of timely and accurate interim financial statements cannot be understated.
Interim financial statements are pivotal documents which form the foundation of effective tax planning. They allow business owners to make informed decisions to ensure they are in an optimal taxation position. Yet, certain challenges can arise during the preparation of interim financial statements, potentially impacting tax planning effectiveness.
Below, we share practical advice to ensure you reap the full benefits of interim financial statements and the tax planning process.
Example:
If your interim financial statements are scheduled to be completed by your accountant in April, your accounts should be reconciled up to 31 March inclusive.To ensure the results are relevant and timely, you should provide all requested information and data to your accountant by the first week of April.
Interim statements are crucial for tax planning, offering essential data for strategic decision-making.
By keeping a tight timeframe to enable your accountant to turn around your interim financial statements as quickly and efficiently as possible, you will have the opportunity to proactively plan and optimise your tax position prior to the June 30 deadline.
If your interims are scheduled for completion in June, (with data reconciled to May 31), it's even more important to provide your accountant with your reconciled data as soon as possible – ideally, within the first day or two of June.
The timeframe to turnaround your interims and undertake strategic tax planning is very tight, leaving you with only a very short time to implement specific tax planning decisions.
Delays could hinder your accountant's ability to finalise your interims promptly or to the best of their ability, potentially affecting your ability to implement our recommendations resulting from our tax planning by the June 30 deadline.
This is because your interims provide you with the opportunity to make informed decisions regarding your tax planning. These decisions will ultimately impact your taxable position on June 30. Once June 30 ticks over it is largely too late to reduce your tax liability.
To this end, it's important to respond to any queries from your accountant in relation to your interims as quickly and efficiently as possible, so that they can ensure minimal hold-ups in the completion of your interim financial statements.
A vital step is the careful preparation and review of your budget before sending it to your accountant.
Overlooking this step can degrade the data quality, limiting our analysis effectiveness and the insights your accountant can provide to you.
In contrast, a thoroughly prepared and reviewed budget lays a strong foundation for estimating your profit and tax liabilities. It allows your accountant to illustrate the impact of various financial decisions on your tax position, ensuring accuracy and strategic foresight.
N.B If you have an agribusiness, and if you use a farm advisor, we recommend undertaking a budget review with your farm advisor
If you are a farmer, ensuring your budget's accuracy before it reaches your accountant for interim analysis involves a detailed review with your farm advisor, (if you have one). It's crucial to confirm that initial predictions (like rainfall, soil moisture, and fertiliser use) still hold true.
Scheduling a review session with your advisor, timed with your interim preparation, can greatly enhance the accuracy and efficiency of the analysis. This proactive step ensures your budget reflects your farm's current operations, leading to a more precise financial and tax obligation assessment.
The primary goal of preparing interim statements before the fiscal year ends is to gain a clear view of your financial health. This helps you and your accountant to accurately assess potential tax obligations and identify urgent issues.
Completing interims also avoids unforeseen tax issues and maximises benefits. At Smith Shearer, we encourage all clients to complete their interim statements, ensuring you're informed and ready to make the best decisions for your business.
The Western Australian Government has announced a targeted grants program to assist small businesses highly impacted by the recent Perth and Peel lockdown. Is your business eligible?
To receive news and resources relevant to you, your farming business and the farming community, fill in your details below and we'll add you to our mailing list.
