The end of financial year is fast approaching; is your business ready?

During these unprecedented times, we need to think differently about our businesses and prepare for tax time before it is too late.

The end of a financial year is the perfect time to plan for your tax position and also the perfect time to set your business up for a profitable year of growth.

So, what should your business be thinking about on the countdown to EOFY 2021?

Many small business owners don’t know that Government initiatives such as the JobKeeper Payment is a taxable income and will be included in their tax return. For the latest information, refer to the ATO’s COVID-19 support for businesses webpage.

You may wish to seek professional advice regarding the tax and superannuation implications of COVID-19 business relief.

It is also now time to strip back the “Covid Numbers” and start looking at your business numbers without the recent Government assistance to plan for what the new financial year might look like without the Government stimulus.

Now is the time to book an appointment to see your Tax Accountant to ensure you have the full picture of your possible tax liability. Before you visit your accountant, make sure your bookkeeping is up to date and correct. This includes entering in your sales and purchases, reconciling your bank accounts, reporting STP, completing and lodging outstanding activity statements and paying any outstanding employee super contributions.

It is also the perfect time to decide if your current accounting software is currently serving its purpose for your business. EOFY is the ideal time to make changes to your chart of accounts to reflect any upcoming changes to your business and to ensure your financial reports can give you the best possible information. Have you thought about how you can streamline your business processes? Take the time to see how technology can help you by looking at what apps or add-ons are available for your business.

The EOFY is the perfect time to review your business structure to ensure it is correct for your future goals and also to eliminate any possible risk. Your Tax Accountant will be able to review your current position and advise you on the best structure for your business.

This is the million-dollar question! If you have to spend $4 to save $1 of tax, you’re still $3 out of pocket. Does the tax deduction support your business’s performance? It’s important to find out what you can claim and what makes sense for your individual business.

Before you decide to make any larger asset purchases, ensure you discuss all of the details with your Tax Accountant. Looking at what pre-payments can be made, such as rent, is another option to discuss with your Accountant.

Now that we are ready and prepared for the EOFY it’s time to start looking at the future of your business and what this looks like. Review and plan your budget for FY22, determine your business goals and exactly what you want to accomplish for the new financial year. Have a look at what business strategy you will use to get you there and most importantly look at your marketing strategy and if this needs any improvements to bring in new business.

The end of financial year can be a stressful time for business owners but it’s important to be prepared, we hope that these tips are helpful to help you get started.

If you need help preparing for EOFY, get the help from one of bookkeepers or business advisors by contacting us on (08) 6153 0036 or hello@thesmallbusinesslounge.com.au.