Year-End Bookkeeping Checklist for Sydney Businesses

As the year comes to an end, the bookkeeping Sydney businesses rely on becomes especially important before the Christmas break. This is the time to review and close off your accounts so you have a clear understanding of your financial position.

While year-end bookkeeping can feel like an administrative task, clean and up-to-date records make budgeting, cash flow planning, and compliance far easier in the new year.

This checklist outlines the key bookkeeping steps Sydney businesses should complete before year-end to ensure their accounts are accurate, organised, and ready for January.

1. Reconcile Bank and Credit Card Accounts

Reconciliation is the bedrock of accurate bookkeeping. It’s your primary defence against errors, fraud, and missed financial details. Catching a discrepancy early, such as a duplicate charge, a missed customer payment, or an unauthorised withdrawal, can save you headaches down the line.

For businesses using platforms like Xero or MYOB, the process is streamlined but still requires attention to detail. Here’s a practical approach:

• Import Statements: Ensure your latest bank and credit card statements are fully imported or fed into your accounting software.

• Match Transactions: Go through each line item. The software will often suggest matches. Confirm these are correct before accepting. Pay close attention to amounts and dates.

• Address Discrepancies: If a transaction doesn’t match, investigate immediately. Was a payment entered incorrectly? Is an expense missing a receipt? Is there a bank error? Resolve these before moving on.

A common mistake is letting unreconciled amounts accumulate. A few dollars here and there might seem trivial, but they can create underlying issues and throw off your financial reports.

2. Review GST and BAS Coding

For Australian businesses registered for GST, correct GST coding is essential. Every transaction must be coded accurately so GST is reported correctly on your Business Activity Statement (BAS).

Errors in GST coding can result in underpaid or overpaid GST and increase the risk of ATO reviews or penalties. Because your BAS is generated directly from your accounting data, accuracy at the transaction level is critical.

Before lodging your final BAS for the year, review your GST entries using a GST audit report or transaction listing in your accounting software.

Look for common issues such as capital purchases coded as general expenses, personal transactions with GST claimed, or income recorded without GST applied. Correcting these items in your system ensures your BAS figures are accurate and compliant.

3. Check Accounts Receivable and Payable

Cash flow needs close attention at year's end, particularly your accounts receivable and accounts payable.

An aged receivables report shows which invoices remain unpaid and how long they have been outstanding. With the Christmas shutdown approaching, there is limited time to follow up on overdue payments before the new year.

To effectively chase unpaid invoices, consider a multi-pronged strategy. Automated reminders from your accounting software are a great first step.

For significantly overdue invoices, a personal phone call is often far more effective. It allows you to understand if there's an issue with the payment and agree on a resolution.

Delaying this process can impact your cash flow in a negative way, leaving you short on funds during a period when your own expenses might be high.

Similarly, reviewing your accounts payable ensures you meet your obligations to suppliers, maintain good relationships for the new year, and confirm your expense records are complete for tax purposes.

4. Review Payroll Records

Payroll is a more complex area of bookkeeping, and errors can penalise businesses financially and in terms of employee trust.

Reviewing this involves a few variations of verifying that all wages, allowances, overtime, and deductions have been calculated and recorded correctly throughout the year. Cross-check employee pay rates against their awards or agreements and ensure leave accruals (annual and personal) are accurate.

With Single Touch Payroll (STP), the ATO receives payroll information with each pay run, making accuracy more important than ever. Your year-end STP finalisation is a declaration that you have provided complete and correct information for the financial year.

Sydney accountants often point to discrepancies in allowances or termination payments as common pitfalls. If you find an error, correct it through an unscheduled pay run before the holiday break.

This prevents issues from compounding and ensures your employees' year-to-date figures are correct for their own tax returns.

5. Confirm Superannuation is Correct and Up to Date

Superannuation guarantee obligations are a legal requirement for Australian employers. Super must be calculated correctly on all ordinary time earnings and paid to the correct fund by the required deadlines.

Late or incorrect payments can trigger ATO penalties, including the

superannuation guarantee charge (SGC), which is not tax-deductible.

As part of your year-end review, confirm that super has been calculated accurately for every eligible employee and that all quarterly payments have been received by the relevant funds.

This includes allowing for processing time through clearing houses. Given the strict compliance requirements, this is an area where errors should be identified and corrected before year-end rather than after.

6. Prepare for December and January BAS

The summer holiday period in Sydney often complicates BAS preparation. Staff leave, business shutdowns, and increased trading activity can make it easy for deadlines to slip.

While the December quarterly BAS is not due until February, the data must be captured from one of the busiest trading periods of the year. Businesses lodging monthly face even tighter timelines, with December and January deadlines arriving quickly.

To avoid issues, ensure all transactions up to 31 December are coded and reconciled before the holiday break. If you work with a registered BAS agent, confirm holiday schedules and agree on when your data needs to be provided.

Preparing BAS information in advance reduces the risk of rushed lodgements and ensures compliance is maintained over the summer period.

7. Review Expenses and Clean Up Transactions

For businesses managing bookkeeping Sydney operations, the accuracy of your financial reports depends on how well expenses are recorded. A year-end review is the right time to clean up uncategorised or incorrectly coded transactions and ensure your profit and loss statement reflects the true position of the business.

This includes identifying any personal expenses paid through business accounts and reallocating them correctly, as these are not tax-deductible.

Incorrectly coded expenses can distort profitability and lead to incorrect tax outcomes. For example, treating a capital purchase as a general expense can understate both profit and asset values.

Year-end is also an opportunity to review recurring subscriptions and ongoing charges, and cancel any services that are no longer required before starting the new year.

8. Review Cash Flow Before Christmas

For business in retail and hospitality, the pre-Christmas period is the busiest of the year. This can mean a healthy influx of cash, but it often comes with increased expenses for stock, staff, and marketing.

Understanding your cash flow position before heading into this intense period is crucial, as a simple cash flow forecast can help you anticipate any shortfalls. This ensures you have enough funds to cover your commitments, including supplier payments, rent, and holiday pay for staff.

To maintain healthy cash flow, consider strategies like adjusting inventory levels to meet demand without overstocking or negotiating slightly extended payment terms with key suppliers.

The festive season brings a unique financial rhythm to the city. Being prepared allows you to capitalise on the opportunities of the season without facing a cash crunch in January, which is often a slower month for many industries.

Common Year-End Bookkeeping In Sydney Issues

Even with good processes in place, many Sydney businesses run into the same bookkeeping issues at year's end. These problems often build up quietly during the year and become more noticeable in December under time pressure.

Reconciliation backlogs

• Impact: Inaccurate financial reports, missed errors or duplicate transactions, and added stress when preparing BAS

• What to do: Allocate dedicated time to catch up on reconciliations, starting with the oldest month. Use bank rules and automation for recurring transactions to reduce manual work

Payroll discrepancies

• Impact: Incorrect Single Touch Payroll reporting, potential ATO penalties, and employee trust issues

• What to do: Conduct a payroll review to confirm pay rates, allowances, and leave balances. Process any corrections before year-end through an adjustment or unscheduled pay run

Miscategorised expenses

• Impact: Distorted profit and loss figures, incorrect tax outcomes, and missed deductions

• What to do: Run a full-year transaction report and scan for anomalies. Reclassify expenses correctly and ensure personal and business transactions are clearly separated

Addressing these issues before the Christmas shutdown helps prevent them from rolling into January, where they often become more time-consuming and costly to fix.

When to Get Professional Bookkeeping in Sydney Support

If reconciliations are falling behind, BAS lodgement feels uncertain, or bookkeeping is taking time away from running your business, it may be time to engage professional bookkeeping in Sydney. For many business owners, outsourcing bookkeeping allows them to focus on operations and growth rather than ongoing compliance tasks.

Working with an experienced bookkeeper provides more than basic data entry. It ensures your accounts are accurate, compliant with ATO requirements, and supported by clear financial reporting that helps inform better decisions. Professional support also reduces the pressure of year-end preparation and prevents small issues from becoming larger problems in the new year.

If you want your books organised and compliant heading into January, Absolute Books & BAS offers tailored bookkeeping and BAS services to support Sydney businesses through year-end and beyond.