It’s Almost End of Financial Year, What Do I Do?

It’s Almost End of Financial Year, What Do I Do?

It’s Almost End of Financial year, what do I do?

End of financial year can be stressful for a small business. Not only are you likely to be busy with keeping your own customers happy and bringing in steady income, but if you haven’t kept on top of your books, you have a bit of paperwork to do too.

If you haven’t been planning for end of financial year by recording your financials and keeping track of your receipts, now is definitely the time to do something about it.

Take a deep breath, and remind yourself that it’s just paperwork.

 

In the simplest terms, don’t panic. It is just paperwork. Tell yourself that you will be able to get this done, and if you truly feel that you can’t, then know that you can get the assistance you need from a qualified bookkeeper or tax agent.

Here are my ten best tips for what to do when it’s almost end of financial year and you’re starting to panic.

Top 10 Tips for End of financial year for a Small Business

1. Give yourself a full day to work everything out 

 

Make yourself a big cup of coffee or tea (you might need a big glass of wine at the end of the day too!)

Don’t schedule this day for too late. You can complete a business tax return yourself by 31 October or appoint a tax agent by this date to complete one for you. 

 

If you are doing your own, schedule a day at least a month before your return is due to give yourself time to ask for help if you need it.

2. Collect all your records into the one place

 

Your tax return needs to be based on your records of what your business brought in and sent out during the last year. Gather together the best evidence you have of your business’s income and expenses, this might be invoices, receipts, bank statements or reports from bookkeeping software such as XERO or MYOB.

3. Brush up on the basics

 

There are some very good resources for small businesses on the ATO website, which are written to help you, not to make your life harder. Contrary to how it may feel at times, the ATO does want to make this process as easy and straightforward for you as possible, and give you the best chances for getting this right.

4. Reconcile all transactions

 

Every transaction that comes in and goes out of your business’s finances needs to be reconciled. 

 

It is best if you track and reconcile these records regularly throughout the year, such as spending a little time every month putting together your invoices and receipts all into one file, or creating a spreadsheet with all of your figures. But if you haven’t done this throughout the year, it’s never too late to start, and the best time is now.

5. Finalise your payroll and superannuation

 

You will need to process and record your final payroll and superannuation payments for any employees and superannuation for yourself, and also make sure that you are reporting this correctly through STP (single-touch payroll) for your organisation.

 

This might include completing STP finalisation. Most good bookkeeping software programs can assist you with this, but if you aren’t sure what to do, contacting a qualified bookkeeper will help.

6. Finalise your stocktake and values of your assets

 

You should be counting all of your stock and getting the right final values of your stock on hand and also any fixed assets that your business owns.

 

Do a full stocktake of any inventory you haven’t sold as this will need to be included in your assets on your end of year tax return. You should also collect together a register of any fixed assets (such as cars, property or plant equipment) that your business owns, and make sure that these assets are recorded as depreciating accurately.

7. Don’t claim for personal expenses

 

Don’t blur the lines between business and personal finances.

 

If you’ve taken business money or used business assets for personal purposes now is the time to report it properly. Make sure that you claim for use of your car and home office appropriately – these are often the areas that can be the trickiest for small businesses to work out.

 

If you haven’t been using a business bank account specifically to track your business finances, and instead have been blurring the lines between your business and personal finances, you will notice the problems now. 

 

This is an excellent time to set up a separate business bank account and be strict about using it moving forward. 

8. Make sure you include Jobkeeper and any other government subsidies

 

Jobkeeper, like most government payments, is subject to tax. Whether you are a sole trader or you have employees, Jobkeeper still needs to be listed as income.

 

If you received Cash Flow Boost credits however, note that these are non-assessable non-exempt income, so you don’t pay tax on these. You may need to report the amount you received for the purpose of other income tests, so you should still indicate that you received these in your business tax return. 

9. Understand that you can carry over losses to the next financial year

 

Many businesses have struggled this past year. If you suffered significant financial losses this year, you may be able to carry over this loss as a deduction on next year’s return, depending on your business structure.  Please consult with your accountant or tax agent for ways to best utilise tax concessions or planning for your tax situation.

 

10. Ask for help if you need it

 

There is no better time than end of financial year to ask for help with your business books if you need it. The ATO has some good free resources if you want to do your own research and a helpline you can contact. You could also speak to a qualified bookkeeper or tax agent specifically about your own business needs – this is usually the best way to know you’ve got the right advice and will complete the most accurate business tax return.

The most important thing to remember is to be honest.

Don’t guess where you don’t have real evidence to support your figures. Don’t estimate. Don’t put on your tax return what you hope you earned or what you wished you’d spent. 

 

You need to be honest on your tax return, and if you aren’t sure of the correct numbers, either find evidence to support them or don’t claim them at all.

About Author

Kate Gordon

With over 20 years experience in bookkeeping across Australia and the United Kingdom, Kate Gordon brings a wealth of knowledge by working with a range of clients from various industries. Covering a portfolio from small and medium enterprises to large corporations has led her to become proficient in all areas of bookkeeping.

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