It’s a time where you get to see how successful you’ve been in the previous 12 months, to ensure all eligible expenses are claimed, and to assess how you can improve moving into the next financial year.
Director of Operations at leading businesses for sale portal AnyBusiness.com.au, Mary Tamvakologos, takes us through the key areas to focus on this EOFY.
Record keeping and compliance
Mrs Tamvakologos notes that some of your yearly tasks as a small business owner may include:
- a summary of income and expenses in a profit and loss statement
- conducting a stocktake
- summaries of your record of debtors and creditors
- collating records of asset purchases or expenditure on improvements for depreciation expense claims
- completing and lodging your income tax returns
- lodging yearly reports or returns for PAYG withholding, fringe benefits tax (FBT), Goods and Services Tax (GST), and the taxable payments reporting system
- meeting superannuation requirements
“While some of these tasks may seem monotonous, they are essential boxes to tick at this time of year so that you can hit the next financial year running,” Mrs Tamvakologos explained.
Find out what tax deductions you can claim
“It’s important that you know exactly what deductions you are able to claim as the operator of a small business.
“It’s best to consult a tax professional in regards to this to make sure you comply with all ATO regulations,” Mrs Tamvakologos said.
You may be able to claim deductions if your business:
- has set up a website
- has motor vehicle expenses
- uses diesel fuel
- operates at home
- has travel expenses
- uses machinery, tools or computers.
“If you are a sole trader, your deductions may differ from the above, so again, be sure to consult a registered tax professional,” Mrs Tamvakologos added.
Keep up to date with tax changes starting next financial year
Mrs Tamvakologos said there may be tax changes or variables each year that you need to be aware of.
“These might include changes in tax law and deductions for small business.Your tax professional should be able to shed some light on any changes applicable to you.”
Review your finances
“The EOFY is your chance to sit down with your accountant or bookkeeper and review you finances,” Mrs Tamvakologos explained.
“It is a time to assess whether financial targets were met, how/why they were or weren’t and an opportunity to plan for the future by setting new goals and plans on how to achieve them.”
Review and update your business and marketing plans
Mrs Tamvakologos said it was important at this time of year to take the time to set yourself up for the year ahead by:
- reminding yourself of your goals and priorities
- assess whether your strategies are working
- adapt to any new changes in your environment
- make the most of new opportunities as they come your way
- prioritise and maximise your effort
Backup and secure your files
“While it’s not the end of the year for most, EOFY is the end of the year for small business owners. While you are probably doing it throughout the year, backing up your business files is an essential part of your EOFY checklist,” Mrs Tamvakologos explained.
She said it was important to backup and store your registration, financial and customer data, and other important business documents in a secure off-site location in order to avoid losing it all in the event of a natural disaster.
Use a registered tax agent
“I’ve said it before and I’ll say it again! Make sure to consult a registered tax agent when it comes to completing your EOFY,” Mrs Tamvakologos insisted.
“It’s too important to get wrong, after all, putting the hard work in each financial year can help get your business set up to work smarter for a prosperous year ahead,” she added.