With the end of financial year looming, small business owners will be turning their minds to how to manage their finances, take stock of their business situation and ensure that they comply with deadlines, reporting, declarations and any financial obligations that have to be completed.
We caught up with Senior Branch Manager Mandy Bell to chat about the five things business owners must think about as the clock ticks towards June 30. Here are Mandy’s top 5 things to think about so your business can turn EOFY into EOFYAY!
1. Organise Your Financial Records
Keeping your financial records in order is the foundation of a smooth EOFY process. Ensure all invoices, receipts, and bank statements are up-to-date and accurately recorded. Utilise accounting software to streamline this process, making it easier to track expenses and income.
Steps to Take:
- Reconcile your bank accounts.
- Review your accounts payable and receivable.
- Ensure all transactions are correctly categorised.
2. Review Your Financial Performance
Understanding your financial performance throughout the year helps you make informed decisions. Compare your current financials with your budget and previous years to identify trends, areas of improvement, and opportunities for growth.
Steps to Take:
- Analyse your profit and loss statement.
- Review your balance sheet.
- Identify any discrepancies or unusual transactions.
3. Maximise Tax Deductions
Take advantage of all available tax deductions to minimise your tax liability. Common deductions include business travel expenses, office supplies, and employee wages. Consulting with an accountant can help you identify additional deductions specific to your industry.
Steps to Take:
- List all potential deductible expenses.
- Gather necessary documentation for each deduction.
- Consult with an accountant for advice on maximising deductions.
4. Conduct an Inventory Check
If your business deals with physical products, conducting an inventory check is essential. Accurate inventory records help you manage stock levels, reduce waste, and ensure you only pay tax on the stock you actually have.
Steps to Take:
- Perform a physical count of your inventory.
- Compare the count with your records.
- Adjust your records to reflect the actual stock on hand.
5. Plan for the New Financial Year
The EOFY is an excellent time to set goals and plan for the upcoming year. Consider your business’s strengths, weaknesses, opportunities, and threats (SWOT analysis) to develop a strategic plan that drives growth and success.
Steps to Take:
- Set realistic financial and operational goals.
- Develop a budget for the new financial year.
- Create a marketing and sales plan to support your goals.
Final Tips
“The end of financial year can be challenging,” says Mandy. “It is vital that businesses stay informed and keep up with any changes in tax laws and regulations that may affect your business.”
“Seeking professional support is also important; your accountant can provide valuable insights and help you navigate complex financial matters, ensuring compliance, maximising benefits and minimising obligations.”
“Finally, the end of financial year is a great time to ensure your accounting and inventory systems are efficient and effective, setting you up for a more productive future with confidence that your systems support and work for you and your business.”
By following these steps, small business owners can prepare for a successful end of the financial year and set their business up for continued success in the future.
