With the End of the Financial Year (EOFY) on 30 June coming closer, it is important that small business owners are prepared and ready to wrap up their financial statements and get their paperwork in order, if they haven’t done so already.
If you still need to prepare for EOFY, you can have a look below at essential tasks that you need to tick off your list. They will without a doubt make planning for the end of June all the more easier and give you peace of mind that you will meet all legal obligations.
1. Get your paperwork in order – including record keeping of your income and expenses
Receipts of your sales and purchases, previous tax returns’ information, employee earnings and contributions, as well as your GST returns and Business Activity Statements (BAS) are all examples of important documentation that you need to sort and get in order.
2. Ensure you are on top of record-keeping tasks that still need to be completed
Actions such as stocktaking, completing and filing income tax returns and lodging annual reports are all important to ensure that you wrap up the financial year successfully.
3. Consider using online tools for EOFY and BAS (your business activity statement)
Online tools, such as online invoicing that can assist with invoice reconciliation, can help you streamline and separate your personal versus your business expenses – so consider using them to ensure that your financial statements are in order.
4. Be on top of tax deductions and concessions that you can claim
As a small business owner in Australia, you are eligible for claiming for most business expenses, provided that they relate to your income source. Typical expenses that you could claim for include car expenses, fuel, home office expenses and business tools such as computers and laptops.
5. Remember: you need to report your COVID-19 stimulus payments
Whether you are a sole trader or partnership, you need, for instance, to include JobKeeper payments as a business income in your tax return. You could also qualify to claim provisional full expensing or loss carry back in your 2020-21 tax return.
6. Be aware of tax changes
Whether you need to consider changes in tax deductions or concessions for small businesses, it is important that you know how these changes will impact your business – discuss any matters of concern with your tax professional so that you are not caught off-guard with payments that will need to be made.
7. Review how you can reduce the amount of tax that your business pays
Paying fourth-quarter super contribution before EOFY or paying expenses such as rent and insurance before 30 June could reduce your tax liability, so check in with your tax practitioner which expenses can be dealt with before the end of the tax year.
8.Keep due dates in mind
Diarise all important due dates to ensure that you do not become liable for Australian Tax Office penalties.
Consider the services of a bookkeeper and accountant
Although EOFY can be a stressful time for small businesses, the services of a bookkeeper and accountant can bring much relief and the assurance that you, as a business owner, will be set to end the financial year with all processes above board. So, get JTRB in and you will be set to complete all your essential tasks for EOFY.