That time of year you may dread as a business owner is just around the corner. That’s right End of Financial Year (EOFY), where you’ll need to complete bookkeeping, tax returns and start planning for the new financial year.
But we have some suggestions of what you can do as a business owner to make your EOFY smooth and stress-free.
Make sure your paperwork is up to date
As the time approaches you can make sure that all your financial paperwork is up-to-date, items such as:
- Receipts for sales and purchases
- Records concerning tax returns, activity statements and employee super contributions
- GST returns and Business Activity Statements (BAS).
Having these important documents ready to go helps streamline your EOFY process and help to reduce your stress.
Make sure your tax invoices meet ATO requirements
To be considered a tax invoice your documents need to contain particular information, such as:
- seller’s identity
- seller’s Australian business number (ABN)
- date the invoice was issued
- brief description of the items sold, including the quantity (if applicable) and the price
- GST amount (if any) payable – this can be shown separately or, if the GST amount is exactly one-eleventh of the total price, as a statement which says ‘Total price includes GST’
- extent to which each sale on the invoice is a taxable sale
So, it is important for your tax return, that both the invoices that you issue, and invoices received meet these requirements.
Follow up on unpaid invoices
Now is the time to follow up on any unpaid and overdue invoices you’re waiting on before the 30th of June. Ensuring your accounts receivables are reconciled, means your cash flow improves as payments arrive.
To help speed up the process, you can try and invoice as soon as possible. The sooner you invoice, the more chance of being paid before EOFY.
Work through your deductions
It is also good practice to work through all your deductions from your expenses and make sure you are claiming what you’re entitled to and that you’re not claiming for things you aren’t meant to be.
You can claim deductions for most business expenses, as long as they are directly related to earning your income. You must also have records to be able to prove any expenses that you claim as business deductions.
Meet your super requirements
If you have employees, you also need to make sure you have met all your superannuation requirements.
Super guarantee contributions must be paid by June 30 to qualify for a tax deduction in the 2021–22 financial year.
We have also previously covered everything employers need to know about superannuation in their business.
Be aware of due dates
Make sure you take note of all due dates. Not only does this help to prioritise tasks and manage time, but it also helps avoid any penalties for missed deadlines by the Australian Tax Office.
Look at dates for things such as:
- Business Activity Statements
- Superannuation guarantee contributions
Check for any changes that may be needed
This is also the best time of year to look over your business and make any necessary changes that are needed. Look at things such as:
- Insurance requirements and needs. If your circumstances have changed, you may need to update your level of cover.
- Business structure. Is your current structure suited to your goals?
As your business grows and expands, it may be in your best interest to change your business structure. The compliance and taxation regulations can differ depending on your business structure.
- Marketing plans – Is your current marketing producing results? Is it the best use of resources?
It’s important to take time to set yourself up for the year ahead. Regularly checking in and updating your plans will help you to:
- assess your goals and priorities
- look at whether your strategies are working
- adapt to any changes in your industry
- highlight any possible opportunities there may be
- prioritise and maximize your efficiency (work smarter, not harder).
Check your Tax Agent is registered
If you are planning on using a Tax Agent to lodge your tax return you should always check that they are registered with the Tax Practitioners Board.
There are two ways you can do this
- Search the TPB register.
- Look for the registered tax practitioner symbol on their website, stationery, brochures or business cards. The registered tax practitioner symbol includes the type of registration and their individual registration number.
All these steps will help to ensure that your EOFY runs smoothly. If you need help getting your business EOFY ready or making sure you start the new financial year with the right foundations in place Sense in Numbers can help.