Get prepared early for the EOFY with these handy tips!
May 31 2023
As we approach the end of the financial year in Australia, it’s important for small businesses to start thinking about their financial affairs. By taking some time to prepare, you can make the end of financial year (EOFY) process much smoother, ensure you meet all your tax obligations and potentially even save money.
Here are some steps Australian small businesses should consider taking in March to prepare for the EOFY:
1. Get organised
The first step to preparing for EOFY is to get organised. Gather all your financial records, including receipts, invoices, and bank statements. This will help you to accurately report your income and expenses, and claim all the deductions you’re entitled to. Talk to an accountant if you have one — they’ll be able to give you advice on any tax deductions you may be entitled to — most notably the $20,000 asset write off for small businesses that was announced in the recent Federal Budget.
2. Review your financial statements
Take some time to review your financial statements, such as your profit and loss statement and balance sheet. This will give you an overview of your financial position and help you identify any potential issues.
3. Look at your financial /bookkeeping software.
If you’re not already using an accounting package, now’s the time. bzTrack is free to use for invoicing and it ensures all your invoices and bills are in one place and the money coming in and going out is easy to keep track of. It also syncs with Xero so if you’re a business that has a team out invoicing on the go, they can send quick customised invoices from their phone and they’ll automatically appear in Xero to be reconciled later or by someone in the finance team.
4. Consider pre-paying expenses
If you have expenses that will be due shortly after the EOFY, consider prepaying them before June 30. This can help you reduce your taxable income and potentially increase your deductions.
5. Check your stock levels
If you hold stock, it’s important to check your inventory levels and write off any obsolete or damaged stock before the EOFY. This can help you reduce your taxable income and improve your cash flow. If you’ve got obsolete stock, now’s the time for an EOFY sale!
6. Reconcile your payroll
Consider your debts with external business. Other checklist items include:
• PAYG withholding payment summary report
• payroll tax
• outstanding leave
• Superannuation contributions — Make sure you’ve made all your required superannuation contributions for your employees. This will help you avoid any potential penalties and ensure your employees are taken care of.
• long-service entitlements
Check out Xero’s information pages.
If you’re unsure about any aspect of your EOFY preparations, seek professional advice. A qualified accountant or tax agent can help you navigate the complex tax laws and ensure you meet all your obligations. There are some great free resources on the Australian Business Govt website.
By taking these steps, you can get ahead of the game and reduce the stress of EOFY. Remember, the EOFY process can be overwhelming, but with proper preparation, you can ensure a smooth and successful outcome for your small business.
Head to www.bztrack.com/signup to create a free account