Countdown to tax time: 7 weeks from 30th June – review your debtors

Count-down-to-Tax-Time-What-you-need-to-do-7-weeks-from-30th-June

This is a great time of the year to review what monies are owed to you – remember you are not in the business of lending money!

Often it is the enticement of an end of year tax deduction that customers may be more willing to pay you so don’t be afraid to dangle this carrot when requesting payment.

To start with, you need to ensure that who your accounting software says owes you money, does actually owe you money.

Print out a Debtors report. In MYOB AccountRight, go into Reports, select Sales, and then select the Receivables Reconciliation (summary) Report either as at 30 April 2015 or the current date depending on how up to date your file is.

What you are looking for is that only the customers that still owe you money is on this list  and after you review that is exactly what this list will say.

Review the Receivables Reconciliation list especially the 31-60, 61-90 and 90+ day columns for accuracy and correct for the following anomalies:

  • Customers may have paid, however the payment hasn’t been allocated against their sales account and will need to be corrected.
  • The customer is simply not going to pay and the debt will need to be written off.
  • The customer will pay but you haven’t been successful in obtaining the money off them. There is no action that needs to be taken in your software however you should try and get this money in before 30 June. No action is required in your software.

Start following up and chasing some of those old accounts – send a courtesy letter requesting payment by the end of the month. If your terms of agreement allow, you may state that you will seek to charge interest if the monies are not received before 30 June.

If you missed last week’s blog, head to countdown to tax time: 8 weeks from 30th June – Let’s reconcile!

The information provided here is of a general nature for Australians and should not be your only source of information. Please consult an experienced and registered tax agent as each small business’s circumstance will vary.

Subscribing or upgrading your MYOB software will ensure your business is always compliant with tax changes, including the government’s new SuperStream system for paying super contributions.

  • http://www.ezyCollect.com.au AJ Singh

    Amanda, very timely advise.

    Reminding customers consistently and in a pro-active manner is critical to getting paid on time. However as most businesses owners tell us, they either don’t have the time or they just don’t like asking/chasing customers for money.

    If this sounds familiar, check out MYOB’s Certified Add-on called ezyCollect (http://myob.com.au/addons/listing/91/ezycollect/) that can help to you automated your debtor management.

    Feel free to call us on 1300 780 524 or drop us a line at info@ezyCollect.com.au if you need more information.

    • Amanda

      Thanks for details of your Add-on

  • http://www.bottrellaccounting.com.au Gavin Bottrell

    Thanks for sharing.