With the end of the financial year (EOFY) fast approaching, business owners are feeling the pressure to ensure everything is in order. From reviewing financial statements to maximizing tax deductions, there’s a range of tasks to tackle before the deadline hits.
Whether you’re a seasoned entrepreneur or a budding start-up, set yourself up for success this tax season with our top tips to prepare your small business for EOFY.
1. Organise important paperwork
A non-negotiable aspect of the end of financial year means checking all reports and records are compliant with legislative bodies such as the Australian Tax Office (ATO). In an ideal scenario, you would diligently organise your tax-related paperwork throughout the year — receipts, supplier invoices, purchase orders, bank statements, donations, and more. However, the reality of managing your own business often leaves you strapped for time, leading to tax preparation being neglected.
But procrastination isn’t your friend when it comes to EOFY. Take proactive steps in the months and weeks preceding it by gathering key documents, including:
- Sales and purchases receipts
- Tax returns
- Business activity statements (BAS)
- Employee super contributions
- GST returns
Keep in mind that the ATO mandates businesses to retain records for a minimum of five years, with employment records required to be kept for seven years if you have staff.
2. Save key dates
An essential part of EOFY preparation is knowing when your statements and reports are due. Make sure you don’t miss a deadline and avoid potential penalties and late charges by taking note of the relevant dates during the financial year.
3. Calculate your deductions
To get the most out of your tax return, you’ll need to accurately calculate your deductions. Both cash and non-cash expenses are permitted and may include things like depreciation of your business assets.
4. Meet your super obligations
Businesses are obliged to meet all super guarantee obligations for their employees. For the 2023–24 financial year, the rate has jumped up to 11% – from 10.5% in the previous FY. A good incentive to take care of these payments now is that you can reap a tax deduction for all super contributions made by 30 June.
Also remember that the super contribution rate jumps up again next financial year, to 11.5% for 2024–25.
5. Keep up to date with tax changes
When gearing up for EOFY, staying aware of any changes to tax regulations and compliance requirements throughout the year. This includes staying informed of updates in tax legislation, potential deductions, and concessions tailored for small businesses.
Engaging in discussions with a financial adviser, accountant, or bookkeeper can provide valuable insights to navigate potential changes – and leverage those that are advantageous. Alternatively, you can stay in the loop with industry regulation by subscribing to the ATO’s small business newsroom.
6. Plan for the financial year ahead
While the main priority at the end of the financial year is fulfilling your tax responsibilities, it also provides a great opportunity to reflect and plan ahead for the 2024-25 FY.
Examine your performance over the last 12 months – What has worked well? Which areas need improvement? How’s your cash flow looking? This will enable you to set specific business goals, implement financial adjustments, and plan ways to manage your cash flow more efficiently.
Make the process easier for yourself next time around!
7. Get expert advice
At Ezi Private Lending, we empathise with the fact that handling taxes often ranks as one of the least enjoyable tasks for business owners. We recognise that it’s not why you embarked on your entrepreneurial journey, nor is it what fuels your aspirations for the future. If you’re grappling with tax-related stress or require assistance with cash flow during challenging times, we’re here to offer our support.
“Tax season can really throw a curveball for Aussie business owners,” says Gary Rawlings, Managing Director at Ezi Private Lending. “When you’re buried in paperwork or staring down a hefty tax bill, a tax relief loan can provide a much needed lifeline to get you through. Whether it’s sorting out GST, super, or PAYG, getting the right business loan gives you the space to breathe and keep going strong.”
If you are struggling with tax or simply need some financial support to get through the tax season, Contact Ezi Private Lending today or call us on 1300 854 033 to see how our team can help.