The end of financial year. It’s plastered across all the shop windows and circled in your calendar, but for some small businesses, the focus on finalising accounts and entering accurate tax returns can be a daunting prospect.
In truth, a little preparation and can a long way. And there are plenty of people and technologies out there to help you. Once you have all your EOFY information to hand, make sure you use it to your advantage. Look back on what you’ve achieved and think and plan for the year ahead,
So what steps can you take to prepare your finances?
Get your records in order
You may not love the word ‘compliance’, but demonstrating you’ve conformed with business laws is an important part of your responsibilities at the end of financial year. A big part of this comes down to accurate record-keeping throughout the year. You’ll need to summarise your income and expenses so as to create your profit and loss statement, list your debtors and creditors, and show records of your asset purchases. These steps enable you to complete your business income tax return – which is another must-do. Need help understanding what’s required? Then turn to an accountant or bookkeeper.
Understand your employee commitments
If you have employees, you also have a responsibility to make sure your payroll is in order. Everyone who your business employs – and that may include you, depending on your business structure – needs to receive a PAYG payment summary by July 14. It allows employees to lodge their personal tax return in time. If you’re using Xero, you don’t have to do anything: employees can access their PAYG payment summary via their employee portal once you’ve pressed publish.
Sort your super
You also need to ensure that any SGC (Super Guarantee Contributions) are paid by 30 June so you can claim them as an income tax deduction in the same financial year. When it comes to super, don’t forget about yourself, the business owner. Often we tick all the boxes for our employees, but leave ourselves to last. You need to have something stashed away for retirement too!
Do a stocktake
If you’re selling a product, and your turnover is more than $2 million and the change in value of your stock from the beginning to the end of year is more than $5,000, you’ll need to do a stocktake before June 30. Many businesses choose to do stocktakes throughout the year to relieve the pressure in June, so think about that for the year ahead. If you’re about to tackle the task now, give your customers a heads up if you think it may impact trading times.
You may not have all the ideal systems in place right now, but the end of financial year is a great time to look at how you can improve your processes for the year ahead. Consider keeping electronic records stored in the cloud to save yourself time and space, or trial an electronic inventory system to reduce the effort required at stocktake time. It’s also the perfect time to sit down with an accountant or bookkeeper to review your business – and get advice for the year ahead.