Software set-up and year-end: the bookkeeping mistakes that snowball

Software set up wrong from day one

• A default chart of accounts that doesn't fit your business, so everything ends up in the wrong place.
• GST settings that don't match your ATO registration: cash versus accrual, quarterly versus monthly, or GST switched on when you're not registered (or off when you are).
• Opening balances never entered, or entered wrongly, when moving from another system. Every balance after that is out.
• Bank feeds connected twice, or not at all for some accounts and cards, causing duplicates or gaps.
• Wrong default tax codes on accounts, so every transaction coded there gets the wrong GST.
• Payroll set up without the right award, super fund details or Single Touch Payroll connection.
• Vehicle finance recorded wrongly. Chattel mortgages, hire purchase and leases are each recorded differently, and the GST claim timing differs.
• Contractor details not recorded. Building, cleaning, courier, IT and security businesses must report contractor payments to the ATO each year (TPAR), which needs every contractor's ABN.

Not updating the books after year-end

This is one of the most common, and most expensive, mistakes. When we prepare your financial statements and tax return, we make adjustments: depreciation, accruals, prepayments, loan and drawings balances, and corrections. If those adjustments never go back into your software, next year starts from the wrong numbers. The balance sheet drifts further from reality every year, and someone has to untangle it later.

The fix is simple: once your financials are done, get the year-end adjustments from us and enter them (or let us do it with access to your file), check the closing balances match the financial statements, then lock the year.

Quick checklist

• Have your accountant check your software settings and chart of accounts before your first BAS.
• Confirm opening balances match your last financial statements.
• Enter your accountant's year-end adjustments, then lock the year.