9 Top Tips to Prepare Your Small Business for EOFY
The end of financial year is quickly drawing near, but there is still enough time for small business owners to prepare and get ahead. It can be a stressful time for small business owners, but by starting early with proper planning and preparation you can avoid the stress and make the most of your tax return.
Instead of leaving it until the October deadline, scrambling to find your documentation, follow our checklist below to help guide you through the end of financial year.
- 1. Starting before your tax is actually due is crucial for small business owners to manage their finances effectively and optimise their tax position. Taking a proactive approach not only reduces the stress associated with the end-of-financial-year rush but also allows for strategic decision making to maximise benefits. Early preparation lays the foundation for a smoother EOFY process overall.
- 2. Take advantage of cloud-based accounting software to streamline financial management for your small business. Platforms like Xero, QuickBooks, and MYOB offer user-friendly interfaces and robust features that can aid real-time record keeping and reporting. By embracing cloud technology, businesses can access their financial data from anywhere, collaborate with accountants seamlessly, and automate repetitive tasks. This not only simplifies tax preparation but also enhances overall operational efficiency, enabling entrepreneurs to focus on core business activities while staying on top of their tax requirements.
- 3. Stay organised throughout the year by establishing a systematic approach to documentation. This ensures that all relevant records are readily available when needed. This includes invoices, receipts, payroll records, and any other documentation related to income and expenses. By keeping accurate and up-to-date records, businesses minimise the risk of errors, mitigate audit concerns, and accelerate the tax filing process. Adopting the digital management solutions suggested above will streamline record-keeping even further.
- 4. Regularly review tax concessions available to your business to maximise tax savings and optimise financial outcomes. Whether it's exploring instant asset write-offs, depreciation allowances, or research and development incentives, staying informed on available concessions can significantly impact your bottom line. Consulting with tax professionals or leveraging online resources such as the ATO website and the Australian Government Business website can help identify eligible concessions and ensure compliance with relevant regulations. By taking advantage of available tax breaks, small businesses can enhance their cash flow and invest in growth opportunities.
- 5. Adhering to superannuation regulations is paramount for small businesses to fulfill their obligations towards employees. Understanding requirements such as SuperStream compliance, the contribution rate (currently 11% of employees' earnings), and reporting obligations, helps businesses avoid penalties and streamline superannuation management. By staying proactive and implementing robust systems for superannuation administration, businesses can mitigate risks and ensure compliance with regulatory requirements. Additionally, exploring opportunities for personal super contributions can help business owners optimise their own retirement savings while capitalising on tax benefits. To learn more, visit the ATO website.
- 6. Seeking advice from qualified accountants is invaluable for small business owners navigating the complexities of EOFY tax planning. Accountants are experts in tax law, regulations, and compliance requirements, enabling them to provide tailored guidance and strategic insights. From identifying potential deductions to optimising timing for significant purchases, accountants play a pivotal role in minimising tax liabilities and maximising returns. By leveraging their professional knowledge and experience, businesses can make informed financial decisions and mitigate risks associated with tax-related issues.
- 7. Preparing for stocktake is a fundamental aspect of EOFY tax planning for businesses that deal with inventory. Conducting a thorough stocktake close to the end of the financial year ensures accurate valuation of stock on hand, which is essential for financial reporting and tax purposes. Many businesses hold a stocktake sale to reduce the amount of older stock, improving stocktake efficiency and creating space for new merchandise.
- 8. Planning for the year ahead during the EOFY period presents an excellent opportunity to review your business's performance and set goals for the next 12 months. By analysing financial data, identifying trends and forecasting business objectives, business owners are able to create budgets, discover new opportunities, and identify areas where your business can improve. Strategic planning sets the stage for success, helping your business achieve new heights over the next 12 months. [Read: Navigating rising costs and their impact on small businesses ]
- 9. Reviewing insurance policies during tax time ensures that you have the right cover for your business now and for the year ahead. As your business develops over time, your insurance needs may change. Perhaps you have some new assets to add to your cover, or your business is performing better than last year and you need to increase your Business Interruption cover [Read: The risks of underinsurance for SMEs]. Engaging with an insurance broker can provide valuable insights and help you determine whether you have the best cover in place for the year ahead. You will be able to operate confidently, knowing your business is protected.
How Coverforce can help
Our team of experienced brokers can offer an obligation free business health check to help identify your specific business needs to ensure you have the right insurance in place. They'll assess your risks and provide personalised advice on the right insurance program to protect your business and assets.
For more information, contact our expert team of brokers at your local Coverforce Office today.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.
REFERENCES
- https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/concessions-offsets-and-rebates/concessions
- https://business.gov.au/grants-and-programs/research-and-development-tax-incentive
- https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/concessional-contributions-cap
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