NZ End-of-Financial Year Health Check – 11 Actions to Take

As another financial year has ended & GST is out of the way, it's crucial for businesses to perform a thorough health check of their 2025 accounts. Ensuring your books are accurate before handing them to your accountant can save significant time, money, and questions. In most cases, no one else will check your accounts thoroughly except you..!

Here’s a practical, step-by-step guide on how to perform your own bookkeeping health check, backed by insights gained from decades of MYOB consulting experience.

Step 1: Check Bank Reconciliations

Reconciliation is foundational. If your bank accounts aren't balanced, nothing else can be trusted. Confirm:

• All business accounts (including savings, credit cards & loan accounts) are reconciled.
• Clearing accounts return to zero or have a known, justified balance.
• Note that you can reconcile ANY account in MYOB – a very handy tool.

If your MYOB software shows unreconciled transactions, these could indicate duplicate entries, errors, or unbanked cash receipts. Investigate and resolve each issue.

Step 2: Hunt for Stale Transactions

Identify and clear out any stale or duplicated transactions. Common causes are double entries or errors from cash handling. Review your bank reconciliation carefully - clear these transactions promptly.

Step 3: Drill Down on Transaction Dates

Future-dated transactions are often errors and distort your financial reports. Use MYOB’s future-dated transactions report to quickly identify these. Ensure prepaid transactions are also correctly dated, preventing accounting errors and inaccurate GST claims.

Step 4: Tidy Up Debtors & Check Out of Balance = $0

Your Receivables Reconciliation Report in MYOB should precisely match your real-world situation of who owed you at 31/03/25.

• Write off negligible amounts - you're unlikely to chase tiny amounts.
• Confirm customer deposits are correct and convert completed sales orders  to invoices.
• Investigate debts older than 90 days, resolving genuine debts and disputes immediately.
• Check for an Out of Balance amount = $0. This confirms your general ledger debtors control account matches the total owed. Investigate and resolve any discrepancies (see pic).

Step 5: Review Creditors & Check Out of Balance = $0

Clear clutter from your Payables Reconciliation Report by:

• Removing duplicate or settled bills.
• Writing off small insignificant balances.
• Entering agreed credit notes & settle to the bill if you can.
• Checking negative or unusually old balances - these often indicate bookkeeping errors.
• Check for an out-of-balance amount = $0. This confirms your general ledger control account matches the total owed. Investigate and resolve any discrepancies (see pic).

Step 6: Verify GST Coding Accuracy

Incorrect GST coding can cost you significantly. MYOB’s GST Code Exceptions report helps identify transactions coded differently from their default settings. Investigate and correct or confirm these differences to ensure accuracy.

Also, see step 11 below as this report confirms if you have claimed GST on each transaction.

Step 7: Check GST Returns still matches that filed with IRD

Re-run each GST return and check it matches what you filed at the time. Create a simple spreadsheet to summarise (see pic below). Investigate discrepancies to the GST detail report and, if necessary, consult your consultant or accountant if you are unsure what to do.

Step 8: Inventory Check (If applicable)

Inventory can be tricky. For businesses managing inventory, confirm the Inventory Value Reconciliation Report matches your Balance Sheet (see pic). Investigate negative quantities or unusual valuations—these often signal data entry mistakes.

• After your 31/03/25 stock take, write off obsolete / damaged or missing stock using an inventory adjustment (code to a cost of sale account).

Step 9: PAYE Check

Verify your PAYE and payroll-related accounts.

• Your Balance Sheet’s PAYE payable should match upcoming IRD payments (see pic). Resolve any inconsistencies, ensuring accurate payroll reporting.
• From your Payroll, run a summary for the 2025 year. This should agree to the gross earnings filed at IRD (note that IRD is based on the date paid).

Step 10: Check your Coding

Run the General ledger report, expand codes and export to Excel or PF (better to use AccountRight browser) to spot errors/inconsistencies:

• Check that debits and credits are in their correct columns.
• Check that GST is calculated on every entry with GST (or not claimed)
• Verify regular payments are accounted for consistently.
• Investigate unusual amounts or payees for possible misallocations.

Step 11: Analyse Financial Reports – Profit & Loss / Balance Sheet

Your Profit &  Loss Report compared to last year offers valuable insights:

• Compare current results with previous years for consistency.
• Confirm that gross margins and net profits align with your expectations.
• Investigate any negative or strange account balances.

Final Thoughts

Taking the time to perform these steps ahead of year-end ensures your business is financially prepared for the new year. Regular health checks highlight your commitment to accuracy and financial health, easing your end-of-year reporting and enhancing decision-making.

Once all 11 steps are done, lock your period (Setup/Preferences/Security) and set the lock date to 01/04/2025. DO NOT UNLOCK or post anymore entries into 2025. Advise your accountant to proceed with year-end.

With over two decades of MYOB consulting expertise, I can confidently say that proactive financial management pays dividends. Remember, robust bookkeeping isn't just compliance—it's good business sense.