The end of the financial year can be an extremely hectic time for small business owners as they try to balance their usual workload with bookkeeping, tax paperwork, and other EOFY tasks. If you’re not careful, you might end up burnt out in front of your computer, surrounded by mounds of receipts and paperwork.
But the good news is that with a bit of planning and organisation, you can significantly reduce the EOFY-induced stress and ensure all your ducks are in a row by June 30.
Most end of financial year activities land in April, May, and June. It’s important that you take note of all the important submission deadlines so you won’t end up facing costly late fees or penalties. You can find a detailed list of all key EOFY dates and activities on the ATO’s official website.
Also, be sure to keep the following details in mind:
Once you’ve noted all the important dates on your calendar, it’s time to review your records and make sure you have all the necessary documents. According to Australian tax law, business owners must keep detailed records of all financial transactions made during the financial year, which runs from the 1st of July to 30th of June.
Below is a list of all the documentation you need to sort before June 30:
Also, do not forget to check if there are any tax or legislative changes that might affect your SME. Speak to your accountant or financial adviser so they can guide you through any new processes and ensure your business is in the best position to capitalise on positive changes.
If your business is able to recover most, if not all, of your unpaid invoices before the end of the financial year, you’d be able to enjoy a better tax position. This, in turn, signals your investors, lenders, and buyers that your SME is successful.
With the end of the financial year just around the corner, you need to double down on your debt collection efforts. Use these last few weeks to send out reminders to the clients on your debtors list. Don’t hesitate to use multiple means of communication to reach customers, including email, phone, and SMS.
It’s also worth noting that your customers can only claim GST credits after they have paid for the products and/or services they bought for their business. Be sure to mention this in your invoice reminders and follow up conversations with your clients. This will certainly motivate them to send payment before June 30.
If you’re having trouble reaching customers, consider sending a Letter of Demand. This official document will catch their attention and show them that you’re serious about recovering what you are owed.
The client’s response to your Letter of Demand will help you decide if you should just write off the debt or if you should send it to a professional debt collection agency for further action.
Consider hiring a professional tax adviser to help you navigate through the complex list of EOFY activities, due dates, and requirements. Tax advisers can also help you with:
Look for an experienced tax agent that is registered with the Tax Practitioners Board (TPB) and preferably has experience working with small businesses in your industry.
The EOFY can also be a great time to take a step back and review your company’s financial position. Were you able to achieve your sales targets from last year? What were the things that hindered and/or facilitated your success? Do you need to adjust your pricing? What sales targets will you set for the next financial year?
The answers to these questions can help you devise a financial strategy that will bring your small business to new levels of growth and success.
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