Pharmacy Owners: Must-Do Actions Before the 30th of June 2023
The countdown to the end of the financial year has begun, and its high time for pharmacy owners to take charge and prepare for a stellar finish. As we inch closer to 30 June, we often receive an influx of inquiries from pharmacy owners and managers, all echoing the same question: "What must we do before the year ends?" Well, fret not, for we have the answers you seek. In this article, we'll delve into the crucial items that demand your attention as you wrap up the year. Get ready to uncover the key tasks that will ensure your pharmacy enters the new fiscal year on a strong footing. Let's dive in!
Review your customer debtors outstanding balance
a. Write off any bad debts
You might be able to claim any amount that will not be recovered from your debtors as a tax deduction. You need to determine that the debt is genuinely bad if it’s very unlikely to be recovered through any reasonable attempts. These attempts can be demonstrated by communications to obtain payment of the debt, any reminder notices issued and phone calls made to the debtors.
We would recommend for pharmacy owners to do this before year ends so if there are any bad debts that needs to be written off, you can claim the tax deduction in the current financial year. It will also mean that you will get an accurate debtors balance at the end of the financial year.
b. Review owners shop accounts
Pharmacy owners normally have a customer account in the pharmacy for any personal purchases made in the pharmacy. If no physical payment is going to be made for this balance, the balance needs to be written off pre-30 June and taken up as drawings in the accounts as this is not a bad debt.
If physical payment is going to be made, this can be treated as normal debtors make sure payment is made before 30 June.
c. Write off shop consumables account
Pharmacies normally have a customer account for any stock that is taken for the shop use. The balance of this shop account can be taken up as a business expense. To get a more accurate debtors balance at 30 June, make sure you can write off the balance of this account as no payment will be received for this account.
Make sure you notify your accountant of any of these adjustments so they can take up these adjustments accurately in the year end accounts.