With the end of the current financial year just around the corner, it is important to understand what this means, as this is an important time for your business. You may ask yourself – is it the end or really just the beginning? Well, it’s a bit of both!
Yes, there are plenty of tasks to tick off the EOFY prep list, but it is also a time to use the data collected over the year to get organised and draft a plan to work smarter in the new financial year ahead.
Many business owners find this time of the year quite stressful, but it doesn’t have to be. Most bookkeepers these days will recommend implementing cloud based software, such as Xero or Quickbooks, into your business – these systems simplify the EOFY prep and reporting dramatically.
What are the key tasks to complete at the end of the financial year?
Some of the yearly tasks required may include:
- Prepare a profit and loss statement – summarise your income and expenses
- Conduct an accurate stocktake
- Summarise your debtor and creditor records, maybe review any bad debs that should be written off – best to discuss this with your bookkeeper or accountant
- Collate records of asset purchases or improvements expenditure
- Finalise and lodge your income tax returns
- Lodge yearly reports or returns for pay as you go (PAYG) withholding including finalising income statements for single touch payroll (STP), goods and services tax (GST) and taxable payments reporting (TPAR) – be aware of due dates for lodgement!
- Ensure that superannuation requirements are adhered to
- Make digital copies of any paper records (and back them up!)
What tax deductions and concessions can you claim?
If your business expenses directly relate to earning your income, you should be able to claim them as tax deductions, but you must have valid records as proof of these deductions.
It may also be worth investigating the tax concessions available to small businesses to see how it could support your business before the end of the financial year. Click here for a list of ATO tax concessions.
Now is also a good time to do the following:
- Make sure that your tax agent and bookkeeper are registered with the Tax Practitioners Board (TPB).
- Ask your tax professional to help you understand any changes in tax law and deductions/concessions that you may need to take note of.
- Be sure to familiarise yourself with common tax time scams such a tax refund and tax owed scams.
How can you prepare for the new financial year ahead?
- Review your finances with your bookkeeper or accountant – Take advantage of the data you have collated over the past financial year. Explore where you have kicked some goals and where you can do things differently. Creating a cash flow forecast can be very useful.
- Review your business plan – This will make you look at your targets and priorities from a fresh perspective and can help you assess whether your strategies need updating or rethinking.
- Review your business structure – With business expansion and growth comes a potential change in business structure. Be sure to discuss the different compliance and taxation regulations with your bookkeeper or accountant.
- Review your business insurance – Changing circumstances could dictate a change in your level of cover. Take the time to read your insurance policies (and the fine print!) carefully or talk to your broker to ensure you are covered where needed.
- Back it up! – Information such as registrations, financial documents and customer/client data should be stored safely and securely. Make digital copies where possible and back up the files.
Closing the financial year and completing all of the above may seem like an uphill battle… But if you can see it as an opportunity to utilise your EOFY data to plan for the future of your business, it will be much less painful. Remember spending time reviewing your business plan and finances essentially saves you time (and money) in the long run.
It also makes a huge difference having a bookkeeper like SYM Business Services in your corner. Our Dream Team can help you implement the right cloud based bookkeeping software for your business and take the headaches out of the end of financial year preparation. Contact us today!
