Is your business ready for the financial year-end? The end of the financial year is just around the corner. As a result, you need to make sure all your bases are correctly covered. But this doesn’t have to be a stressful time as long as you plan ahead and get your business ready. Today we’ve put together a guide to help you prepare for the end of the tax year!
1: Plan Your Year Ahead
It is important to work with your accountant and/or bookkeeper to work out a plan for the new financial year. An experienced accountant or bookkeeper, like those from Siragusa, can help you work out a budget and discuss your taxes. They can also help you implement a 12-month strategy to ensure there are no surprises!
When it comes to tax time, we all want to claim as many expenses as we can, but you don’t want to claim for the wrong items. As a result, it is a good tip to separate business expenses by using different credit cards and bank accounts. It is also important to keep sufficient records of what you’ve spent money on and store your receipts as you go, whether in a folder or electronically. This way, you know exactly what you’ve spent, where and when, in order to make the right claims.
2: Start the New Financial Year with a Clean Slate
It is important to tie up any loose ends to make the end of the financial year, smoother. You, or your bookkeeper, should ensure you’ve invoiced all customers correctly and you have paid any due bills. It is also important to bank any cash and cheques, as well as check that all payments have been recognised.
You should ensure you, or your bookkeeper, have entered all outstanding bills into your accounting software or books, and that any work you’ve done has been invoiced. By doing so, you will make the process of going through your records much smoother and easier for your accountant. It will also mean you can get on with the job of running your business without spending time going over the books with your accountant and chasing up expenses or unpaid invoices.
3: Get the Right Financial Advice
Your business health is extremely important. Just like you wouldn’t trust Web-MD for health issues, you can’t trust online forums for tax advice. It is important to you discuss your finances and any financial issues with your accountant. They can also help you work through what needs to be done before the financial end of the year. Your accountant can help answer questions about the documents you need, what tax needs to be paid, how much more, if any, you need to pay, and how you can pay less.
4: Utilise Apps and Cloud-based Accounting Software
Apps and cloud-based accounting programs, like Xero, can help make running your business easier. It can also help your accountant and/or bookkeeper completely end of financial year accounts faster and easier, meaning your taxes are done faster, taking stress off your shoulders. Using the programs means you are all working from the same set of data and it is easy to keep up to date. As a result, there’s no messy backlog to deal with, and you can spend more time on your business. Keeping on top of your banking, especially bank reconciliation, helps you keep on top of what’s happening in your business. By consistently storing key financial information in your app or cloud-based software over the financial year, your end of the financial year will go smoothly.
5: Check Your Record Keeping for End of Financial Year
If you don’t use a bookkeeper, you need to stay on top of your financial records yourself, which can be stressful. Your yearly tasks may include:
- Ensuring you have a summary of income and expenses as part of your profit and loss statement
- You need to conduct a stocktake
- Create summaries of your debtors and creditors
- You need to collate records of asset purchases or expenditure on improvements
- This helps calculate depreciation expense claims and capital gains tax
- Ensure you are meeting superannuation requirements
- Make digital copies of any paper records and backing them up
An accountant can help you with all of the above as well as:
- Completing and lodging your income tax returns
- Lodging yearly reports or returns for:
- PAYG
- FBT
- GST
6: Discuss What Tax Deductions and Concessions You Can Claim with Your Accountant
You can claim deductions for most business expenses, as long as they directly relate to earning your income. Some deductions you may be able to claim include:
- Setting up a website
- Vehicle expenses
- Fuel expenses
- Working from home expenses
- Travel expenses
- Machinery, tools, computers, etc.
However, you must keep accurate records to prove the expenses you are claiming are business deductions. As a result, it is important to plan for the year, as we suggested earlier. An accountant and/or bookkeeper can help you work out which of the deductions are appropriate and write off any debtors or assets before the year-end.
Working with an accountant to discover all the possible deductions you can claim is important for small businesses. Too many SMEs lose out on deductions that can help them grow their business every year.
7: Review Your Business Plans For End of Financial Year
It is important that you take the time to sit down with your accountant and review your business plans. By regularly reviewing and updating your business plans, you can:
- Remember your goals and priorities
- Adapt to any changes in your environment
- Assess whether your strategies are working
- Work smarter, not harder
- Make the most of opportunities that come your way
Further, as your business grows and expands, you may need to change your business structure or even restructure your business. It is important to keep on top of these changes as the compliance and tax regulations may differ, depending on your business structure.
Do you need help preparing for the end of the financial year? Are you looking for help creating a business plan or updating an older one? Contact the team at Siragusa, today! We can help you prepare for EOFY and help you plan for the financial year ahead!