Advivo Business Advisors and Accountants share their tips to prepare your business for the end of the tax year.
The end of the financial year is fast approaching, and it can be a busy time for small businesses as they work to ensure their accounting affairs are in order. With some planning and preparation, EOFY doesn’t need to be an exhausting time and there are several steps small business owners can take to prepare themselves for EOFY, to assist you in getting the right tax outcomes for your business.
We’ve put together a few tips to help you prepare for the end of the tax year:
Get the right advice
Talk to your accountant or bookkeeper and work through what needs to be done before year-end. They will help ensure your paperwork is up-to-date and accurate and help guide you through the process and answer any questions you may have.
Be aware of due dates
Put all the required dates in your calendar to give yourself a reminder that will help you avoid ATO penalties. A full list of these can be found on the ATO website.
Use cloud accounting software
A cloud accounting platform such as Xero and MYOB makes running your business easier and helps your accountant or bookkeeper complete your year-end accounts faster. This enables you to all work from the same set of real-time data, allowing you to keep in touch with what’s happening in your business.
Check your inventory levels
Doing a stock take in good time before year-end ensures the accuracy of your balance sheet and that you have an accurate picture of your stock on hand. Inventory checks do not just take into account stock levels but also consumables and assets on hand, which ensures your asset register is up to date and helps to advise the future year’s budget for any asset purchases that may be required.
Manage your deductions
To ensure you get the right deductions for your expenses at tax time, it’s important to find out what you can claim. The ATO website has more information
Plan for Success – Now and in the future
The end of the financial year is a fitting time for business owners to analyse the performance of their business, allowing them to see what worked and what didn’t. Review your full budget vs actuals for the financial year to identify and explain any variances; this will form a key part in confirming your budget forecast for the next 12 months. It is important to consider scenarios (upside / downside) as part of your analysis and this is extremely relevant in the current economic climate.
Make sure you set goals and targets that are achievable and that you communicate your goals to everyone relevant in the business. People need to know what they’re aiming for, including you. Don’t forget to set a monitoring and review process for these goals and targets at the same time. This way you and everyone else can stay up to date with the progress being made. Check out our Monthly Service Programs (MSPs) for just one way that we can help with monitoring and progress review options for your business.
Use Our EOFY Checklists
We have a Pre and Post 30 June checklists that you can complete to make sure your business is ready for the EOFY:
Bear in mind that not everything on these lists will apply to everyone. They are generic lists designed to provide you with a reminder of what may apply to you and your business.
The end of the tax year is a great time to reflect on your business and ensure your finances are in order for the new financial year, and also to take the opportunity to take a broader perspective on how you are doing and where you are heading.
If you have any questions about EOFY for your business, please contact the team at Advivo Business Advisors and Accountants today.