Join Australia's most dynamic and respected property investment community

can i claim unpaid expenses this financial year

Discussion in 'Small Business' started by Hodge, 24th Jun, 2016.

  1. Hodge

    Hodge Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    514
    Location:
    Melbourne
    Hi everyone, just wanted to get some clarification.

    Say for example i purchase a heap of stock for my business before the end of the financial year on my 30 day account, can I claim the expense this financial year even though payment on the account won't be made until the end of next month ? Or do I need to pay the account in full by the 30th in order to claim the expenses this financial year?

    Thanks
     
  2. Hodge

    Hodge Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    514
    Location:
    Melbourne
    Also forgot to add I'm trading as a sole trader if that makes any difference .
     
  3. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

    Joined:
    14th Jun, 2015
    Posts:
    2,112
    Location:
    Sydney & Adelaide
    If the stock is to be onsold its its inventory. If its asset then it needs to be paid by June 30th.
     
    Last edited: 24th Jun, 2016
  4. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,385
    Location:
    Somewhere in the land of Oz
    I believe this may be called an "accrual". (Do a Google for your situation i have nfi)
     
  5. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    1,056
    Location:
    Brisbane
    I am not an accountant but, if you have an invoice, you can enter it into your accounting system and claim it as an expense.

    Otherwise, business would have to made expense adjustments for every dollar in their Accounts Payables. I have never heard of a business doing this.
     
  6. RPI

    RPI Property Lawyer, Town Planner Business Member

    Joined:
    19th Jun, 2015
    Posts:
    714
    Location:
    Brisbane
    Are you accounting on a cash or an accrual basis?
    I am also not an accountant but my understanding from running businesses.

    Cash basis means you only an incur an expense when paid and only receive income when receipted, accrual the expense is incurred when you receive the supplier invoice and the income is entered when you issue the invoice.