EOFY: Here’s what to do in the lead up!
Ok, let’s be honest, a lot of us look at EOFY as a time to take advantage of great sales (we even provide them!), and the less fun job of sorting out taxes. While yes, these are two important parts of this time of year, there are things you should really have sorted in the lead up that will make sure you kick off the new financial year in good stead. From our farmer mates with live stock(take) to transport service owners and shipping dock managers taking care of the finances, these things might not be near as fun as a run on a Magni or Liugong, but they are equally productive to the running of the business. So let’s dive into the real hard yakka of crossing the T’s and dotting the I’s, and get ready for tax time.
Get going on these things first…
Some stuff needs to be done earlier than others. Small business owners and managers of finances, especially, can really benefit from prioritising these tasks ahead of time as the EOFY is hectic enough without needing to fast track things that could have been done earlier.
As a small business ourselves, we know what this can be like, and try to encourage our clients to work ahead as much as possible (and that includes the hiring and buying of machines - it’s a busy time of year!).
- Record of debtors and creditors for the previous financial year
Knowing your financial position, wholly, is extremely important. You want to know, to the dollar, what you owe and who owes you. This ensures your tax is up to date and you won’t run into any issues down the track by small mistakes or misses. It will also allow you to best decide if you can afford to take advantage of EOFY deals that may help make your business or worksite run more efficiently at a busy time of year.
- Lodge your tax returns!
While we might have until October to do this before penalties are introduced, it’s a far better business decision to have it completed and lodged early on. Aside from the fact that it frees you up mentally and frees your to-do list up a little, it also means you could have quicker access to any returns you might be due.
- Lodge yearly returns and reports
This includes your PAYG withholding, GST, fringe benefits tax and your taxable payments reporting.
- Back up your records and file them
Audits for businesses can happen at random and with very little notice. Every year, do your future self a favour and create clear files for every year that include all of your backed up records.
Don’t miss out on deductions!
Deductions can make a big difference to your bottom line at the end of the day, or financial year. While you might know of some, you could be missing out on others.
Here are areas you could claim deductions as a small business owner:
- Website set up
- Vehicle costs
- Working from home expenses (including electricity, internet and computer/laptop use)
- Tools, machinery and equipment
Again, keep a solid record of your expenses just in case they are required down the track, and to give to your accountant.
Don’t just set and forget your taxes
Accountants are extremely important to the EOFY process because they are firmly in that lane and can be enormously beneficial to getting the best outcomes. However, it’s important that you are completely over what is being lodged. It’s your business (or responsibility, if you manage the finances for a business), and that is what the tax department cares about. Ensure your accountant is experienced in tax, can provide credentials, and is transparent with you about the work they’re doing.
We hope this helps you this EOFY! Check out the ATO website for a more exhaustive list of requirements you need to know about.
Disclaimer: Please note that this information is a guide only, and is not to be interpreted as final advice. Please talk to your accountant or business advisor for your specific needs.