The end of the financial year (EOFY) for the majority of small businesses can be a bit of a scramble to make sure you’ve got everything together for the July 1st deadline. There are lots of things you can do to make the lead up to the EOFY a lot easier for yourself.
Don’t do it alone
As a small-business owner, you wear many hats. It’s natural to take on the financials yourself. However, going it alone makes it easy to make unintended mistakes, increasing your chances of errors and potential fines. Not to mention the time you’re spending getting everything in order and trying to make sure you’re making the correct deductions.
Consider bringing in an expert. Their experience and expertise will give you back that time and make your life easier by ensuring you’re not making any errors and are being as tax efficient as possible.
Evaluate the current tools you’re using
If you’re doing your accounts in Excel, you are wasting precious time and ultimately missing out on important opportunities to run your business more effectively. Cloud accounting software will save you both time and money while providing you with a better overview of your finances, making the EOFY a lot easier.
We recommend using Xero, which will give you the flexibility to run your business from work, home, or on the go. You can be confident that you have an up-to-date picture of how your business is doing, no matter where you are. This means everything flows where it needs to, and July 1st becomes nothing more than a few clicks, with no nasty surprises.
There are also numerous tools and apps available to help you stay organised and keep your business on track to prepare for tax time. You can try the business tab of the ATO smartphone app for relevant tax information, and apps such as Receipt Bank to remove the burden of receipt-keeping.
Get everything together
Ideally, when tax time comes around, you’ll be able to pull out your perfectly kept records, detailing your income and expenses from throughout the year. If not, now is the time to:
- Check that you have all your receipts filed appropriately either electronically or on paper. These include your sales records, expense records, employee records, and end of year tax records.
- Reconcile your accountants including your bank, capital, loan, debtors, creditors, and investment accounts.
- Pay any outstanding bills.
- Chase down any receipts you’re owed.
You can write-off bad or non-recoverable debts which means they can be claimed as a tax deduction. However, in future, you might consider using accounting software with online invoicing, like Xero we mentioned above to follow up payments and take the hassle out of customers failing to pay on time.
Get those deductions
Make sure you’re claiming all the appropriate deductions you can. This includes things like rent, utilities or repairs for your business, or professional, legal and accounting advice. If you’re working with an accountant, they can help ensure you’re not missing anything.
If you want to claim a tax deduction for super payments you make for employees, the super has to be done and paid before June 30th, otherwise, the opportunity for a deduction passes.
Also don’t forget the instant asset write off, which means any asset you purchased this year can be written off provide it is less than $20,000. If purchased between now and 30-Jun it increases to $30,000.
Set yourself up for success in 2019
The EOFY is a great time to sit down with your accountant or bookkeeper to take stock of where you’re at and review your finances.
Beyond considering whether you’ve met your targets for this financial year, take the opportunity to set your goals for the next financial year and look at ways that you can implement or improve processes and utilise technology to simplify your account keeping for the next 12 months. Small changes, can make a big difference.