The end of the financial year: it’s one of those dates that tend to come around all too quickly for small business owners, and for many of you, it can be a little daunting.
How will you find the time to prepare all of those important financial documents that relate to your business and then lodge your tax return on time, all while running your biz and for many of you, developing EOFY promotions or offers too?!
We’re here to help! Take a read of this handy checklist to get yourself set up for success.
Commit to regular bookkeeping
You can do this yourself or outsource to someone like us, but either way, it’s essential to stay on top of your numbers throughout the year. You can do this by reconciling your bank accounts each month, and preparing end of month reports which account for all of your incomings, outgoings and liabilities. It will save you a lot of time once EOFY rolls around, trust me!
Organise your receipts and invoices
Go back through your bank statements and make sure all of your receipts and invoices match up. To avoid having to rummage through emails or even your desk drawers for physical receipts, look to a cloud-based technology like EzzyBills, and send everything there in real time.
These tools will then organise all of these transactions for you, so you can refer back to them whenever you need. Make sure you keep all receipts for five years too – it’s a requirement of the Australian Taxation Office (ATO) that applies to all small business owners, no matter your size.
Chase and pay any outstanding invoices
The comparison exercise I mentioned above is really effective because it will allow you to identify any unpaid client or customer invoices you may have missed, as well as pay anything you owe to your debtors.
This includes if you have employees and need to pay them any wages or superannuation, as all of this needs to be reported to the ATO as part of your tax return too, and means your team can lodge their individual returns.
Your accountant will also need to see these items to prepare your tax return, as well as justify the amount of tax you pay and are potentially owed.
Consider your potential deductions
Generally speaking, deductions are the costs you incur to run your business, and can be used to reduce your tax liability. So, it pays to not only keep track of your receipts and stay on top of your bookkeeping when it comes to deductions, aim to do some research in advance to see if there are any business purchases you’re able to make which can be offset in this way.
The latest federal budget, for example, allows small business owners to claim 120% of costs they incur on new technologies and employee training as deductions. It’s worth speaking with your accountant before you make any purchases, but incentives like this are ones to keep in mind if you’re looking to invest in things like technology and training.
Run your reports, and plan for next year
Once all of this is in order, it’s time to produce your end of year profit and loss (P&L) statement – which acts as a summary of all of your earnings and expenses – and balance sheet, as you’ll need to take these to your accountant. EOFY is also a great time to analyse your annual budget and cash flow forecast, to see how you performed against your goals.
This historical data is super powerful when it comes to setting yourself up for success in the future. You can use it to create your budget and cash flow forecast for the following year, as it allows you to identify overspending, see which costs could be reduced or cut, and also determine if there’s room to invest in the business in the future.
This might be upping your marketing spend, outsourcing some tasks you’ve found you haven’t had time to manage yourself, employing more staff, or investing in inventory.
Planning ahead in this way is something I would definitely recommend, and it’s why budgeting and cash flow forecasting are part of the bookkeeping services we offer here at MicroChilli.
If you need support with getting your numbers organised before EOFY, or are eager to start the next financial year off on the right foot, get in touch with us today! Book a complimentary consultation here.