A guide to getting your books ready before 31 March.
1. Reconcile Everything in Your Accounting Software
- Clear the deck: Ensure every transaction up to 31 March is fully reconciled in Xero or MYOB.
- Match the statement: Check that your accounting software balance matches your actual bank statement balance.
2. Review Your Debtors & Write Off Bad Debts
- The 31 March Rule: To claim a tax deduction for bad debts, they must be formally written off in your accounting system on or before 31 March. If you leave them active past this date, you could end up paying tax on income you will never receive.
3. Conduct a Physical Stocktake (Inventory)
- Count your goods: If your business holds inventory, you must complete a physical stocktake as close to 31 March as possible.
- The $10,000 Exemption: If your total stock value is under $10,000 and your annual turnover is under $1.3 million, you can choose to skip the physical stocktake and use your opening stock value instead.
4. Prep Your Payroll and Employee Leave
- The 63-Day Rule: Employee bonuses, holiday pay, or redundancy payments owed at 31 March can be claimed as a deduction this year—but only if they are physically paid out within 63 days of your balance date (by 2 June).
- Reconcile PAYE: Ensure all final PAYE schedules match your payroll software figures perfectly before submitting to Inland Revenue.
5. Review Assets & Expenses Under $1,000
- Low-Value Asset Write-off: Check your asset purchases. Assets costing $1,000 or less (ex. GST) can be claimed immediately as a business expense in the year of purchase rather than being depreciated over time.