Essential tasks for the end of financial year
End of the financial year is an important time for small businesses, completing bookkeeping, tax returns and planning for the new financial year. Putting the hard work in each financial year can help you get your business organised and work smarter in the year ahead.
Also consider planning for the end of year as well. You should try to write off any debtors or assets before the year ends to claim a tax deduction.
Here are some essential tasks for your end of financial (EOFY) year to-do list:
Record keeping and compliance
Some of your yearly tasks as a small business owner may include:
- a summary of income and expenses in a profit and loss statement
- conducting a stocktake. See the Stocktakes page on the Australian Taxation Office (ATO) website to learn more about stocktakes and tax
- summaries of your record of debtors and creditors
- collating records of asset purchases or expenditure on improvements to calculate depreciation expense claims and for capital gains tax purposes
- completing and lodging your income tax returns
- lodging yearly reports or returns for PAYG withholding, fringe benefits tax (FBT), Goods and Services Tax (GST), and the taxable payments reporting system
- meeting superannuation requirements.
Find out what tax deductions you can claim
Be sure to do your homework and know exactly what tax deductions you can claim. You may be able to claim deductions if your business:
- has set up a website
- has motor vehicle expenses
- uses diesel fuel
- operates at home
- has travel expenses
- uses machinery, tools or computers.
Keep up to date with tax changes starting next financial year
There may be tax changes each year that you need to be aware of. These might include changes in tax law and deductions for small business.
Be wary of tax refund scams
There are a number of scams that target small business around tax time. Common tax time scams include:
- tax refund scams where the scammer will claim you have overpaid your taxes and are eligible for a refund. However, in order for you to receive this refund, they will claim that you need to pay a fee for administration or transfer costs.
- tax owed scams where the scammer will claim that you’ve underpaid your tax and will need to repay the amount you owe immediately. In order to make this payment, they request your credit or debit card details, or ask you to send money through a money transfer.
Review your finances
Sit down with your accountant or bookkeeper and review your finances.
Look at whether you met your targets and what you can do differently next financial year. Create a cash flow forecast to manage any potential shortfalls and ensure you can still pay your staff and suppliers.
Review your insurances
Check that your business has the right insurances in place. If your circumstances change, you may need to update your level of cover.
Read the product disclosure statements (PDS) for your insurance policies carefully – don’t assume you’re covered. Look up certain terms such as floods as the definition may vary among insurers.
Backup and secure your files
Backup and store your registration, financial and customer data, and other important business documents in a secure off-site location. This can help ensure your business can stay up and running during events such as natural disasters.
The Money Edge | Bundaberg