Colin’s Tips to Avoid EOFY Chaos and Get Ahead for Next Year

August 7, 2025

Written By Colin Napier

I love July, a time of crisp air, crackling fires and collective sighs of relief in finance teams around the country! Did you get it right this end of financial year? Or did it leave you with a few more grey hairs, vowing to be more organised next year? For those who fall into the former group – great work, keep it up! (Or maybe ask, what can you do even better next year?) The latter camp – you’re not alone. And while I hate to twist the knife, the fact is, EOFY issues are (almost!) always the result of poor processes during the year. It might start with your depreciation register dropping off, rolling into incomplete invoicing and lazy coding, followed by inaccurate accruals for employee leave. Next thing you know, it’s June 30 again, and your year-end profit and loss statement differs wildly from the June management accounts in front of you, often creating tax issues. After all, if your profit is not accurate, how can you possibly know your tax liability? So, while June 30 is still recent enough for you to be feeling the pain, let’s make some post-EOFY resolutions you can stick to.

1. Get on top of your monthly reconciliations

I’m passionate about businesses having monthly management reporting in place (so much so, I wrote a free report on it, located on our home page). This includes all reconciliations. A few healthy habits I recommend in this regard:

Create a month-end checklist with working document trails, to ensure the process doesn’t live inside one employee’s head
Carefully review your balance sheet, P&L and cash flow every month
Automate your bank feeds and have a consistent cut-off for monthly transactions
Set deadlines for business expenses and invoices
Clear the decks of any mystery balances or queries – don’t let them fester

2. Review accruals and provisions monthly

Some of the biggest EOFY headaches come from inaccurate employee accruals, things like leave, wages and super. These things add up if not managed properly throughout the year. Using employee leave as an example, you might have estimated 4 weeks for every employee, but find most people have accrued 5-6 weeks. Multiply this across a large workforce, and it can result in a significant adjustment. Keep on top of accruals and provisions by:

Running monthly leave and super accruals
Capturing all unpaid invoices at month end
Being proactive about employees taking leave
Having templates for significant regular accruals

3. Maintain your depreciation and asset register

Depreciation and asset management is a common EOFY pain point, as it’s just so darn easy to deprioritise during the year. There are more important things to worry about, right? But it pays to keep a steady effort, so you don’t miss tax deductions or wind up paying too much. Read more about tax deductions here. Consider this example. You purchase a $120,000 delivery van in July. At an average useful life of 10 years, it will depreciate at $1,000 a month. If you fail to post this amount monthly, you’ll be staring down $11,000 worth of entries by the time EOFY rolls around. You also risk overstating profit and throwing out your tax calculations. Multiply this by all the assets in your business, and you’ve got a decent-sized headache! Here’s how to stay on track:

Post depreciation monthly. Yes, that’s right. Monthly. (One more time for the cheap seats in the back!)
Clean up your asset register on a regular basis, including removing any redundant items
Create an approvals process for new purchases and disposals, and include your depreciation methods/rationale
Verify your assets semi-regularly and be clear on what is an asset and what needs repair. (And if it’s the latter, how long has the item been out of action?

4. Keep your debtors and revenue recognition clean

Staying on top of unpaid invoices and revenue is not just about maintaining cash flow; it’s about removing ambiguity from your P&L. For example, your accounting system tells you there’s $90,000 worth of invoices owing, but $11,000 is past 90 days overdue with no indication of when (or if) payment will be made. What’s your process for recognising bad debts? You need to be across such issues in real-time, because they hinder your ability to make informed financial decisions. Here’s what I recommend:

Review aged debts monthly, then follow up and escalate (or make the call to write off)
Track all work in progress, particularly those with milestone payments
Have a clear invoicing cut-off every month, so revenue lands in the correct period
Proactively reconcile accounts for your biggest clients to avoid surprises
Clearly document how and when revenue is recognised

5. Be proactive with bank reporting

Another subject I have discussed before is how to maintain a proactive relationship with your bank, and this has particular relevance to EOFY. Banks often request financial reporting and results earlier than the financial year ends. So, if there are substantial variances between your management accounts, your covenant calculations will likely be off, which can negatively impact your credibility with the bank. Unfortunately, you can’t expect your banker to be sympathetic if those guesstimates you included based on June’s management report prove to be completely out of whack, once you’ve reconciled, done year-end adjustments and finalised everything by June 30. Avoid unnecessary pain by:

Using a template to track loan covenants throughout the year
Setting monthly reporting deadlines in line with the expectations of the bank
Comparing your actuals to budget every quarter (at least)
Being transparent – ensure all key numbers are backed up by supporting documentation, and variance reports are provided to explain any major shifts
Being proactive in communication with your banker

As a final point, if implementing the above recommendations seem like too much work for your finance department, that’s a resourcing issue – one that can be easily remedied. Solid monthly reporting, reviews and processes are more than just a nice-to-have for business tax time; they are the essential components of a healthy financial infrastructure, and, in my expert opinion, are the only way to enable informed decision-making year-round. Need help setting up systems that will serve you well next June? I welcome your call. Read more on our other blogs:

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