Wise Accounts Blog

This is the time of the calendar you approach with mixed feelings. Joy of getting a tax refund or dread of rummaging through your files with your accountant and being hit with a double whammy: the taxman liability and the accountant fees (which are tax deductible - next year that is...)

What would it be like if you lived in a country with enough state revenue as to not levy taxes from its citizens? (Where is that? - you may ask...) Would people actually bother to find out if they are making a profit or a loss?

Most people do not consider that they are in business for themselves. Even if your sole source of income is earning a wage you do have an estate, you do have assets and liabilities and - wait for it - you do have a net-worth! The epitome in financial carelessness is illustrated by the tradesman who walks into his accountant's office once a year, a shoe box full of receipts under his arm and proudly declares: "Do my tax!"

Fun aside, one of the painful experiences of the end-of-financial-year is the stubbornness of some accounting programs in regard to rolling the data over into the new year. For reasons beyond your control you may be prevented from rolling the books into the new year because some superannuation fund is late in providing your statement, some bank maybe not post the interest you earned for a while or some expense incurred has not been finalised.

This can create some distortion and it is a well known trick to minimize a loss in the year just ending at the expense of next year results which are being penalised by carrying this burden over.

Wise Accounts comes to the rescue by providing an elastic timeframe for your accounts. Your ledger does not need to be exactly 12 months long. You and only you decide when it is convenient to chop the current ledger into last year and current year with opening balances to boot. There is actually a screencast on this very subject to take you by the hand and show you how it's done. Enjoy!

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