Advivo inspire their clients, this quote from Winston Churchill says it all “If you fail to plan, you are planning to fail”
It’s the end of the financial year and many businesses are thinking about that five-letter word: taxes. Fortunately, there are some tax planning strategies that your business can use to avoid panic and prepare for the next financial year. Remember: it’s not always about tax!
Five Tax Planning Strategies
These strategies can be implemented at any point, as they are also good business practices.
1. Review Debtors — Collect What You Can And Write Off Bad Debts
Managing and reviewing your debtors will allow you to get paid quicker and prevent bad debts. Creating a schedule for collecting debt will also help you maintain a stable cash flow. If a debtor owes you money, but it looks unlikely that they will pay you can write off the bad debt. This removes the debtors outstanding balance and allows your expenses to be correctly updated.
2. Consider If There Are Any Benefits to Paying Dividends
Dividends are your share of profits in a company. If your company pays out dividends, it could be very helpful to review them. The most important thing to think about is if you are profiting from them. If not, consider investing that money elsewhere.
3. Review Depreciation Schedules
Depreciation schedules break down the depreciation of a firm’s long-term assets. They allows firms to keep track of their assets and evaluate how they might depreciate over time. It’s also good to be aware of certain details of an asset such as date of purchase, cost, length of use and its value.
4. Stock Take
Stock taking is counting your on-hand inventory. This should include every inventory item at a specific point in time and the quantity of that item. Stocktakes are important because they will help you find stock issues, ensure your business is meeting desired targets and tells you how well you’ve been tracking your inventory.
5. Get Good Advice
Talk with an accountant! Not everybody is a numbers person, but rest assured knowing that an accountant is a professional in the industry. While it may be easier to ask a friend for advice, speaking to an expert could save you time and money.
Having the right tax planning strategies can be a make or break action for the end of financial year, so make sure you get yours right.
At Advivo Accountants and Business Advisors, the goal is to help you thrive and grow. We work with clients to create personalised accounting solutions so they can succeed.