May 30 2022
We're approaching the time of year that many small to medium businesses dread — end of the financial year! But don't fret, here are five simple things you can do to help smooth the process.
1. Get your financial documents in order before the 30th June.
Make sure all your records such as receipts for all sales and purchases, tax returns records , activity statements and employee super contributions and GST returns and Business Activity Statements (BAS) are up to date.
2. Ensure you're meeting your superannuation requirements.
All employers are required to pay employee contributions of 10%. If you're up to date on paying Super by the 30th June, you will be able to claim a tax deduction income this year rather than having to wait until 2023.
3. Check your deductions.
You may be interested in the Government's instant asset write off scheme for small businesses.
Plan ahead! By pre-paying services and supplies such as office supplies or costs for supplier services, such as accountant fees, up to a period of 12 months or less, you can reduce your taxable income for the financial year. Approach your suppliers for all invoices made up to 30 June and organise payment arrangements to secure the best number of tax deductions. Take a look at the ATO's website and search for ‘Deductions for prepaid expenses'.
If you're a sole trader, have a look at the ATO's 'my tax deductions' tool for help recording your income and expenses throughout the year.
4. Review your tools to help improve cashflow.
A good cashflow forecast will help you understand when money is coming in and when its going out of your business.
There are ways you can access that cash more quickly and using bzTrack's Invoice Discounting is one of them. By offering early payers a discount if they pay within 10 or 20 days, you can access cash quickly that you may have had to wait 90 days for or involve bank loans or invoice factoring.
It's also worth noting that as of March 2022 until June 2023, small businesses using tools such as bzTrack will be able to claim 120% of the costs as deductions. Learn more over at the Guardian.
5. Report any Covid 19 stimulus payments.
Any COVID-19 related grants or support payments you have received need to be included in your tax return.
For sole traders, include this as business income in your individual tax return.
For partnerships, trusts and companies, report this as business income in your partnership or trust tax return, or income in your company tax return.
Head over to the Australian Taxation Office (ATO) website for more information.
