End of financial year (EOFY) experts have uncovered the most common mistakes for Australian business navigating this stressful period.
Following a revealing member survey by the Institute of Public Accountants (IPA) member a group of accountants from the firm have offered advice to struggling businesses in the midst of fiscal-year end paperwork.
The IPA survey conducted in partnership with MYOB, revealed that almost all the respondents said their clients were not fully prepared when submitting their EOFY statements (98 per cent).
In particular, the survey exposed that the most common slip-ups Australian business operators make with their end of year paperwork are:
1. Miscoding transactions (65 per cent)
2. Does not provide enough detailed or supporting information (64 per cent)
3. Not keeping accounts and records up-to-date throughout the year (62 per cent)
4. No contact with their accountant over the financial year (42 per cent)
5. Not fully trained up on accounting software functionality (39 per cent)
When asked about the most important steps business operators could take to prepare for EOFY, accountants ranked ‘responding to requests for additional information in a timely manner’ first (88 per cent). ‘Keeping accountants advised of major transactions as they occur’ followed (77 per cent), then ‘handing financial reports in on time’ (69 per cent).
Accounting software users, however, were more confident than non-users that their accounts and book-keeping will be in order for EOFY (69 per cent versus 62 per cent respectively). Seventy-four per cent said software helped speed up the process of EOFY preparation and 33 per cent said it saved them more than one day of time spent getting their accounts in order.
Commenting on the survey results, IPA chief executive officer Andrew Conway said the results show that there is a strong opportunity for businesses to draw on the expertise of their public accountant beyond financial reporting
“They [public accountants] can provide strategic business advice and planning throughout the year, and assist with sales and growth forecasts, cash flow management, accessing funds and succession planning. By engaging their accountant, clients can gain more knowledge and advice to be more profitable,” he said.