Each year, accountants ask clients to provide information to complete the financial statements and tax returns. Some of the questions may be the same as the previous year, which may cause frustration, and you may be asked for more information and explanations. There’s a reason for this – read on to see how you can benefit!

Accounts receivable

We ask you to look at your debtors listing and indicate which invoices are unlikely to be paid.


When first entering the accounts receivable, a sales transaction was generated and you paid tax on the sale.

If you don’t expect to receive payment, we can record a bad debt and claim a tax deduction.

After all, you shouldn’t pay tax on income you don’t receive!

Fixed assets – write off

Your accounting system will be able to produce a fixed asset listing. We strongly suggest you go through the list and let us know if there are assets which have been stolen, thrown away, or no longer in use.


These assets no longer have any value – we can write them off and potentially claim a deduction for you. 

Fixed assets – invoices

We’d like to see invoices for all asset purchases or at least know the type of asset purchased.


Inland Revenue provides us with the maximum depreciation rates for different classes of assets – the higher the depreciation rate, the higher the tax deduction.

If you don’t let us know what type of contracting or building equipment you’ve purchased, the maximum rate we can use is 13%. However, if we see that the asset is a floor sander, we can claim 25%!

Purchased an asset for your cafe? If we know it’s a commercial microwave oven, we can use 25% instead of the default 16%!

Finance agreements

It’s not uncommon for assets to be purchased at least partly on finance. In those situations, we ask you to upload the finance agreement.


If there are no transactions going through the bank account (such as a deposit or partial payment), there’s no way for us to know that you have a new asset and a new loan unless you tell us.

  • We make sure GST has been claimed on the asset
  • Interest on these finance agreements are usually tax deductible

Accounts payable

If you have creditors that aren’t recorded in your Xero file, we ask you to provide a list at balance date. 


Adding a creditor usually means an additional expense which will reduce profit and your tax bill!

Vehicle log book

If you’re a sole trader, you should prepare a log book at least once every 3 years. It should record at least 3 consecutive months of typical travel – each trip documents the date, purpose for travel (business or private), and the number of kilometres.


If sole traders cannot provide a log book, we can only claim 25% of vehicle expenses, including depreciation and interest on associated loans.

Bank statements

Seeing the balance of the bank accounts at the end of the year is important.


Even if the transactions come through Xero via a bank feed, there’s still a possibility that one or two haven’t quite made it to the Xero system. By agreeing the bank statement to the Xero balance, we know that all transactions have been captured.

Loan statements

Along with asking about bank statements, we also need the loan statement(s).


Banks usually issue a statement which summarises the principal and interest payments, along with the closing balance at year-end.

We can then check that interest has been correctly claimed (particularly important for rental property owners) and that all transactions have been recorded in Xero.

Business and private vehicles 

Each year, we need to know which business vehicles are available to be used privately. This may change from year to year as you upgrade, buy, or sell vehicles.


We’re required to make an adjustment for tax purposes – knowing which vehicles are available from the business and from you personally could make a big difference to our calculations.

Investment portfolio reports

These investments are often not recorded by Inland Revenue and we can only obtain the information from you.


There can be some pretty complex rules about income and taxes locally and from overseas. However, the biggest win for clients is claiming the expense paid to the portfolio manager!

Income protection insurance

Your insurance provider should send you a summary each year, showing your policy and premiums paid. We’d like to see these.


Income protection insurance can be claimed as a tax deduction in your personal tax return. Note that health and life insurance cannot be claimed.

Just be aware that if income protection insurance is claimed, any payouts you receive will be taxable.

Additional information

In case we’ve missed something you think is relevant to your financial statements and tax return, you can always add comments and documentation.


It could work out to be advantageous from a tax perspective. Provide us with as much information as you like, and we’ll determine its impact on the financial statements and tax return.


The more information you provide up front and in a timely manner, you’ll find the process more efficient. 

At Traktion, most of our questions are asked via an online questionnaire. You can stop and start the questionnaire in your own time – what’s important to us are full explanations and supporting documents!

Stock on hand

If your stock (physical items used to sell to customers) is more than $10,000 or you’d like us to include the value in your annual accounts, we’d like to know its cost value (excluding GST).


Your stock value is recorded in two places – the profit and loss account, and the balance sheet.

Getting a bit technical here – you will have paid for purchases during the year. However, if you haven’t sold them at balance date, we cannot claim these expenses in the current year (they’ll be claimed next year when sold).

In the balance sheet, it’s recorded as a separate asset

Work in Progress

In the same category as stock on hand, some businesses buy materials and pay labour costs but haven’t actually raised an invoice to customers.

This is called Work in Progress and impacts your profit and loss account and balance sheet.


As with stock on hand, the cost has been incurred but the sale hasn’t been recorded. The costs associated with WIP cannot be claimed this year as a deduction. Once WIP is used and sold to customers, it can be deducted for tax purposes.

You’ll also find WIP in the balance sheet as a current asset.

Payroll records

For clients with employee, your payroll records are handy. 


We compare the gross wages in your payroll system against the amounts filed with Inland Revenue, as sort of a sense-check for your wage expense.

Also, if we’re recording annual leave for you, your payroll system can provide us with what we need with just a click of a button or two!

Home office expenses

For those who have a separate space in the home, garage, or shed primarily used for business purposes, we ask for details of your home expenses and the area used.


We can claim a deduction for a portion of your home expenses. These include mortgage interest, rent payments, power, phone, rates. You’d be surprised how much tax can be saved!


The more information you provide up front and in a timely manner, you’ll find the process more efficient. 

At Traktion, most of our questions are asked via an online questionnaire. You can stop and start the questionnaire in your own time – what’s important to us are full explanations and supporting documents!


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