Streamline your business' approach to end of financial year
Start your business' EOFY preparation early this year and make the most of online banking tools to save time.
Tax time is on the horizon and for business this usually means performing a complex juggling act – bringing expenses forward to reduce taxable income, estimating asset value or potential write-offs, and ensuring that your business is set up for the new financial year.
The good news is that by taking a strategic approach to your EOFY obligations and making the most of online tools, this time of year doesn’t have to be the headache it may have been previously.
Devise an EOFY strategy
Identify and action key tasks early so your business can manage the extra demands of tax time as efficiently as possible.
- Set up an internal task force to ensure records are up-to-date, ATO compliant and that all supporting documentation for deductions and concessions is in order.
- Review your assets now to identify which can be upgraded, which have depreciated and which can be written off.
- Focus on chasing down bad debts or write them off before June 30.
- Simplify your account reconciliation process by linking your CommBiz transaction feed directly to your cloud accounting software.
Seek out opportunities
Put your business in the best possible position to maximise returns and stay on top of cash flow during EOFY by being prepared for discussions with your accountants. They can provide you specific advice based on your industry and circumstances. They will help you consider:
- The impact of business growth on your business. For example, if you’ve expanded your workforce in the last year, there may be implications for payroll tax and tax claimed on your employer super contributions.
- Any large or unique expenses. ‘Big ticket’ items purchased throughout the year may have certain tax implications, e.g., selling business assets may incur Capital Gains Tax.
- Options to bring forward expenses. Bringing forward expenses into this FY could reduce taxable income. You may be able to pre-pay interest on loans or upgrade fixed assets like systems, office fit-outs or equipment.
With CommBiz you can also give your accountant direct ‘read-only’ access to appropriate records (e.g., expense reports, balance sheets) making it easier to refer to relevant figures during discussions.
Avoid common mistakes
- Engage with your accountants early and throughout the year. Don’t neglect your accountant’s input until the last minute.
- Be vigilant with your record-keeping. In the EOFY frenzy, it is common for businesses to submit miscoded transactions or provide insufficient supporting documentation. The subsequent request to re-supply records is time-consuming the second time around.
- Know your dates. Keep your finance team or bookkeepers on top of the ATO’s deadlines for lodging relevant documents, including PAYG withholding annual reports, fringe benefits tax return, GST annual return and taxable payments annual report.
- Be smart about cash flow. It can be a balancing act to strike the right mix of bringing expenses forward to reduce taxable income, and ensuring the business is supported through potentially quieter months of July and August.
Understand regulation changes
Tax regulations and obligations change from year to year and it’s a dangerous assumption to simply re-create records from the previous years’ rules. Check in with your accountant on what changes could affect your obligations. These may include, but are not limited to:
- SuperStream is a government reform aimed at simplifying how superannuation is processed. It primarily involves changing how data is collected and stored. For businesses with 20 or more employees, you will need to be SuperStream compliant by 30 June 2015.
- Re-introduction of fuel excise indexation. Double-check to see how this may affect fuel tax credits for your business.
All new updates to tax regulations can be found at the ATO website and your accountant can advise what impact these will have on your business.