Many Australian businesses only close their books thoroughly at 30 June, which can leave six months of errors to unwind in July. A proper half-year close at 31 December catches them halfway through the year. It gives owners, boards and lenders a reliable half-year result and resets the forecast for the rest of FY2026-27. This checklist covers the close in the order it is usually done.
Last updated: 11 October 2026, checked against ATO due-date, FBT and Payday Super guidance.
What Is a Half-Year Close?
A half-year close is a month-end close done to a higher standard at 31 December. Every balance sheet account is reconciled and supported, accruals and prepayments are booked, payroll liabilities are tied out, and the result is reviewed against budget and last year.
Most private companies are not legally required to prepare half-year accounts. Disclosing entities (such as listed companies) are, under Part 2M.3 of the Corporations Act 2001. For everyone else, the half-year close is a management discipline. It is most useful for businesses with investors, lenders, boards or an exit plan.
Our board and investor reporting service can prepare the half-year pack.
Key Dates to Plan Around
- Super guarantee under Payday Super (wages paid from 1 July 2026): Date: Received by the fund within 7 business days after payday (longer in some cases, such as new employees); Source: ATO
- December 2026 monthly BAS: Date: Thursday 21 January 2027. For business clients with turnover up to $10 million who report GST monthly and lodge electronically through a registered agent, the concession date is 21 February 2027, a Sunday, so it moves to Monday 22 February 2027 (not available to businesses that defer GST on imports); Source: ATO
- October–December 2026 quarterly BAS: Date: The standard date, 28 February 2027, is a Sunday, and Monday 1 March 2027 is Labour Day in Western Australia. The ATO treats a public holiday in any whole state as a non-business day for everyone, so its public holiday table gives Tuesday 2 March 2027 as the first business day. There is no BAS agent concession for this quarter; Source: ATO
- FBT year and return: Date: The FBT year runs from 1 April to 31 March, so the current FBT year ends 31 March 2027. Lodge the FBT return and pay by 21 May 2027, or generally by 25 June 2027 if a tax agent lodges it electronically (you must be on the agent's FBT client list by 21 May). A return is required if you have FBT payable or paid FBT instalments through your activity statements; Source: ATO
When a lodgment or payment due date falls on a Saturday, Sunday or public holiday, you can lodge and pay on the next business day (ato.gov.au/BASduedates). Don't leave it to the last day: plan the close so the BAS is ready well before the deadline.
Before Christmas: Set Up the Close
- Set the close calendar. Work around the shutdown. A realistic SME target is a draft pack by mid-January and a final by the end of January.
- Confirm the last pay runs. Public holidays change processing dates and penalty rates.
- Plan Payday Super around the shutdown. Under Payday Super, contributions for wages paid from 1 July 2026 must be received by the fund within 7 business days after payday. The old 28 January quarterly due date no longer applies to these wages. Public holidays are not business days, but allow time for clearing-house processing. The ATO Small Business Superannuation Clearing House closed from 1 July 2026 (ATO). See Payday Super is now live.
- Request supplier statements for December from your main suppliers.
Step 1: Cash and Bank
- Reconcile every bank, credit card and loan account to 31 December statements.
- Clear or explain unreconciled items older than 30 days.
- Reconcile payment gateway and clearing accounts (Stripe, PayPal, Square) to zero or a supported balance.
- Revalue foreign currency accounts at the 31 December rate.
Step 2: Accounts Receivable
- Reconcile the aged receivables report to the balance sheet.
- Review debts over 60 days: chase, provide for, or write off.
- Check for unapplied credit notes and payments.
- Record debtor days for the half and compare with the same half last year.
Step 3: Accounts Payable and Accruals
- Reconcile aged payables to the balance sheet and supplier statements.
- Accrue December costs not yet invoiced (utilities, contractors, professional fees).
- Book prepayments so only the half-year portion of annual costs hits the P&L.
Step 4: Payroll and Employee Liabilities
- Reconcile wages payable, PAYG withholding payable and super payable to supporting reports.
- Confirm super for each pay run met the Payday Super deadline.
- Review annual and long service leave balances. See annual leave liability.
- Check STP reporting matches payroll for the half, including qualifying earnings and super liability.
Hypothetical example: leave liability over Christmas
Assumptions: 20 staff averaging $1,800 a week, with 3.2 weeks of annual leave owing each at 31 December.
- Leave liability: 20 × 3.2 × $1,800 = $115,200
- If each person takes 2 weeks over Christmas, the business pays 20 × 2 × $1,800 = $72,000 for leave in a period with little matching revenue.
This is a common cause of a January cash dip.
Step 5: GST, PAYG and the BAS
- Reconcile the GST control account to the October–December BAS.
- Reconcile PAYG withholding and PAYG instalments.
- Confirm your lodgement date (see Key Dates above). Our registered BAS agent services lodge from the reconciled file. Full dates are in BAS due dates 2026-27.
Step 6: Stock, Work in Progress and Fixed Assets
- Count stock, or run a reliable cycle count, at 31 December and adjust the inventory balance.
- Review work in progress and unbilled revenue job by job.
- Review fixed asset additions and disposals and book depreciation.
Step 7: Loans, Related Parties and Equity
- Reconcile loan accounts to lender statements.
- Review director and related-party loan accounts. Amounts owed by shareholders or their associates can raise Division 7A issues for the income year ending 30 June. These generally need to be repaid or put under a complying loan agreement before the company's lodgment day. See Division 7A for owner-operators.
- Check intercompany balances agree.
Step 8: Review the Result
- Compare the half-year P&L to budget and to the same half last year.
- Explain each material variance in one line. See budget vs actual variance analysis.
- Review gross margin by product, service or job, and cash generated against profit.
Step 9: Reforecast the Second Half
Roll the actuals in, update the January–June assumptions, and model cash to 30 June, including tax and super timing. Our cash flow forecast calculator is a starting point.
Step 10: Build the Half-Year Pack
- Half-year P&L, balance sheet and cashflow statement
- Budget vs actual and prior-year comparison
- Key metrics: revenue growth, gross margin, debtor days, cash runway
- One page of commentary
- Updated full-year forecast
Doing the Close in Xero or MYOB
The steps are the same in any accounting system. The menus differ.
In Xero
- Bank: reconcile every account to the 31 December statement balance, then run the bank reconciliation report as at 31 December and confirm the statement balance and the balance in Xero agree.
- Receivables and payables: run the Aged Receivables and Aged Payables reports as at 31 December and agree each total to its balance sheet control account. A difference usually means a journal was posted directly to the control account.
- Foreign currency: if your plan includes multi-currency, run the currency revaluation at 31 December so foreign currency balances are restated at the period-end rate.
- Accruals and prepayments: post them as manual journals dated 31 December. Xero lets you set an auto-reversing date on a manual journal, so set accruals to reverse on 1 January.
- Lock the period: once the pack is final, set a lock date of 31 December so nobody changes the half-year by accident (Xero Central).
In MYOB
- Reconcile each bank and card account to 31 December using bank reconciliation.
- Agree the receivables and payables reconciliation reports to the balance sheet.
- Post accruals and prepayments as general journals dated 31 December, and enter the reversing journals dated 1 January.
- Use MYOB's lock period setting to stop transactions being entered before 1 January once the half-year is final.
Sample Journals for 31 December
All figures are hypothetical. Account names depend on your chart of accounts. Amounts are GST-exclusive, because GST is claimed when the tax invoice arrives, not when a cost is accrued.
1. Accrued expense (December legal work not yet billed, $4,000)
- Dr Legal fees $4,000
- Cr Accrued expenses $4,000
- Reverse on 1 January, then enter the supplier bill normally when it arrives.
2. Prepayment (annual insurance of $12,000 paid on 1 October and expensed in full)
- Months used to 31 December: 3, so the half-year expense should be $12,000 × 3 ÷ 12 = $3,000
- Unused portion: $12,000 − $3,000 = $9,000
- Dr Prepayments $9,000
- Cr Insurance expense $9,000
- Release $1,000 a month from January to September.
3. Accrued income (December work invoiced in January, $15,000)
- Dr Accrued income $15,000
- Cr Revenue $15,000
- Reverse on 1 January when the invoice is raised.
4. Depreciation (equipment costing $60,000, 5-year straight-line accounting life)
- Half-year charge: $60,000 ÷ 5 ÷ 2 = $6,000
- Dr Depreciation expense $6,000
- Cr Accumulated depreciation $6,000
5. Annual leave provision (leave report $115,200, ledger balance $108,000)
- Movement: $115,200 − $108,000 = $7,200
- Dr Annual leave expense $7,200
- Cr Provision for annual leave $7,200
Attach the support to each journal (the supplier quote, insurance invoice, timesheet or leave report), so a reviewer can follow it without asking.
A Half-Year Pack Template
Keep it short enough that a board will read it. A workable structure:
- Summary (one page): revenue, gross margin %, EBITDA, net profit, cash, debtor days, each against budget and the same half last year, plus three key messages.
- Profit and loss: H1 actual, H1 budget, variance, and H1 last year.
- Balance sheet: 31 December against 30 June and 31 December last year.
- Cashflow: operating, investing and financing cash flows, and cash generated against profit.
- KPIs: the four to six measures that drive your business, such as utilisation, average order value or churn.
- Reforecast: full-year forecast against the original budget.
- Risks and decisions: what the owners or board need to decide before 30 June.
- Appendix: the close checklist with who reconciled and who reviewed each balance.
How to Reforecast the Second Half
- Lock the actuals. Use July to December as final, after the close.
- Pick a method for revenue. Driver-based forecasts (customers × average spend, or billable hours × rate × utilisation) are usually more reliable than a percentage uplift.
- Update the cost base. Include known changes: new hires, rent reviews, software price increases and planned spending.
- Rebuild the cash forecast. Add the timing of BAS, PAYG withholding, super under Payday Super, payroll tax, loan repayments and income tax instalments.
- Explain the gap. Show the difference between the reforecast and the original budget, and what drives it.
- Run a downside case. For example, revenue 10% below the reforecast with costs unchanged, and check the cash low point.
Hypothetical example: three ways to reforecast revenue
Assumptions: original full-year budget $4.0 million, split evenly. July–December actual revenue was $1.8 million against a $2.0 million budget, 10% below.
- Keep the second-half budget: $1.8m + $2.0m = $3.8 million
- Apply the first-half shortfall to the second half: $2.0m × 90% = $1.8m, so $1.8m + $1.8m = $3.6 million
- Driver-based: if the shortfall came from one large client that has now left, rebuild the second half client by client instead.
The two simple methods differ by $200,000. The pack should say which method was used and why.
Common Half-Year Close Mistakes
- Closing without supplier statements, so missing bills are found in February.
- Expensing annual costs in full when they are paid, which distorts both halves.
- Leaving leave provisions at the 30 June balance.
- Ignoring unbilled work, which understates revenue in service businesses.
- Not locking the period, so the half-year figures change after the board has seen them.
- Treating the December cash balance as profit, when part of it is GST, PAYG and super owed in the new year.
FBT and the Christmas Party
The FBT year runs from 1 April to 31 March, so the current year ends 31 March 2027, and the return and payment are due by 21 May 2027 (generally 25 June 2027 through a tax agent lodging electronically). Christmas parties and gifts may create FBT, depending on cost per head, location and who attends. Record costs and attendee numbers now, while they are easy to find, rather than reconstructing them in April. See fringe benefits tax in Australia.
Two exemptions to check first. Food and drink provided to current employees on your business premises on a working day is exempt from FBT, whatever it costs, unless you value entertainment using the 50/50 split or 12-week register method. Costs for partners and other associates, or a party held somewhere else, may be exempt as minor benefits if the cost is less than $300 per person (GST-inclusive) and the other conditions are met. Where the cost is exempt from FBT, you generally cannot claim an income tax deduction or GST credits for it (ATO; ATO, minor benefits).
FAQ
Do private companies have to do a half-year close?
Most do not. Disclosing entities must prepare half-year reports under the Corporations Act. For other businesses, a half-year close is a management discipline.
When is the October–December BAS due?
The standard date is 28 February 2027, which is a Sunday. Monday 1 March 2027 is a public holiday in Western Australia, and the ATO's public holiday table gives Tuesday 2 March 2027 as the first business day, for taxpayers in every state. There is no BAS agent concession for this quarter.
When is the December 2026 monthly BAS due?
Thursday 21 January 2027. Business clients with turnover up to $10 million who report GST monthly and lodge electronically through a registered agent can lodge by Monday 22 February 2027, because the concession date of 21 February falls on a Sunday.
When is the FBT return due?
The FBT year ends 31 March 2027. The return and payment are due by 21 May 2027, or generally 25 June 2027 if a tax agent lodges electronically and you are on their FBT client list by 21 May.
Does Payday Super change the January super deadline?
Yes. For wages paid from 1 July 2026, super must be received by the fund within 7 business days after each payday, rather than by the old 28 January quarterly date.
About Scale Suite
Scale Suite provides embedded finance teams for Australian SMEs, including registered BAS agent services. Visit Scale Suite | Board and investor reporting | Finance services
Disclaimer
General information only, current as at October 2026. Scale Suite is a registered BAS Agent, not a licensed tax, financial or legal adviser.
Sources
- Australian Taxation Office, Due dates for lodging and paying your BAS: https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/business-activity-statements-bas/due-dates-for-lodging-and-paying-your-bas
- Australian Taxation Office, BAS agent lodgment program 2026–27: https://www.ato.gov.au/tax-and-super-professionals/for-tax-professionals/prepare-and-lodge/bas-agent-lodgment-program-2026-27
- Australian Taxation Office, Payment deadlines for Payday Super: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-on-payday/payment-deadlines-for-payday-super
- Australian Taxation Office, About Payday Super: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/payday-super/about-payday-super
- Australian Taxation Office, Lodgment and payment dates on weekends or public holidays: https://www.ato.gov.au/tax-and-super-professionals/for-tax-professionals/prepare-and-lodge/registered-agent-lodgment-program/lodgment-and-payment-dates-on-weekends-or-public-holidays
- Australian Taxation Office, FBT and festivities: what employers need to know: https://www.ato.gov.au/businesses-and-organisations/small-business-newsroom/fbt-and-festivities-what-employers-need-to-know
- Australian Taxation Office, Minor benefits exemption: https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/exemptions-concessions-and-other-ways-to-reduce-fbt/minor-benefits-exemption
- Australian Taxation Office, Lodging your FBT return and paying: https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/fbt-registration-lodgment-payment-and-reporting/lodging-your-fbt-return-and-paying
- Xero Central, Set up or remove lock dates: https://central.xero.com/0/article/Set-up-and-work-with-lock-dates
- business.gov.au, End of financial year checklist: https://business.gov.au/finance/yearly-financial-tasks/end-of-financial-year-checklist
