A Guide to Wrapping Up EOFY with Success!

Its almost here… EFOY or End Of Financial Year…. Great for some retail bargains but maybe not so good if you are a Small Business Owner. Let's explore some EOFY tips and tricks to make it a bit easier. But relax if a Tax Agent Lodges your tax return for you then you are on a lodgement list and you probably have until the new calendar year to actually finalise the year, mere mortals have until October 31 if you don’t want to be fined.

1. Get Your Financial Records in Order

Before anything else, ensure your financial records are up-to-date and accurate. This includes:

Reconciliation of Accounts: Make sure all your bank accounts, credit cards, and loans are reconciled. Good bookkeepers will probably (should be) reconciling your subsidiary ledgers like payroll to the General Ledger as well.
Invoicing and Receipts: Double-check that all sales have been invoiced and all expenses have receipts. There are a gazillion ways these days to save your receipts electronically so don’t be that client that takes a shoe box, envelope or plastic bag to your accountant / bookkeeper.
Inventory Count: Conduct a stocktake if you deal with inventory to ensure your records match physical stock. Inventory usually represents a large value on your Financial Reports so it is a really good one to get right.

2. Review Your Financial Performance

The EOFY is an excellent time to reflect on your business’s financial health. Analyze key metrics such as:

Profit and Loss Statement: Have you made money this year? But a little late to review it once a year at tax time, this is a great thing to be on top of regularly
Cash Flow Statement: Where did your profit go? Cashflow statements literally trace where the money some from and where it flowed out to
Balance Sheet: Review your assets, liabilities, and equity to get a comprehensive picture of your financial standing. If those words are foreign to you chances are you are not looking at your business as a whole as per the Inventory count, inventory is a large asset on your Balance Sheet and you need it be correct. There should be more assets (and liabilities) on the Balance Sheet that a business needs to present correctly, and might need to understand or keep an eye on.

3. Maximise Tax Deductions

As a BAS Agent I am unable to advise on this but BAS Agents / Bookkeepers should be a go to point for the Tax Agent and the Business Owner. So when us bookkeepers nag you about the receipts we are HELPING YOU!!! Your accountant can’t claim things if they can’t prove them - give us AS MUCH INFO as possible please and we will translate it to Accountant speak so your accountant can maximise the tax Deductions. Also talk to your Tax Agent / Accountant NOW so that they can guide you to good tax deductions BEFORE 30 June.

4. Superannuation Obligations

Super is only tax deductible is it is PAID in the financial year so get your payroll done ASAP and get Super paid straight away as well.. If you a using the ATO clearing House you are working too hard, talk to me about payroll software as most of them let you press a button and reporting and payment done in one hit.

5. BAS and GST Reporting

Review your Business Activity Statements (BAS) and ensure your GST reporting is accurate. This includes:

GST on Sales and Purchases: Double-check all transactions to ensure GST has been correctly applied.
Fuel Tax Credits: If eligible, ensure you’ve claimed all available fuel tax credits.

Or just get your friendly BAS agent to do this; BAS agents need to maintain their professional education so they probably know a bit more about GST than you do?

6. Plan for the New Financial Year

EOFY isn’t just about closing the books; it’s also about planning ahead. Set clear goals and strategies for the new financial year:

Budgeting: Create a detailed budget to guide your financial decisions. Some great Budgeting apps plug into Accounting Software so less data entry and manual calculations these days
Growth Strategies: Can you triple sales next year? Will you need staff to do that? Start the recruitment drive now….
Risk Management: Did you have a workers comp claim that doubled your Insurance Bill? Start looking at things that happened this year that you don’t want to repeat.

7. Seek Professional Advice

EOFY tasks can be complex, and seeking professional advice can ensure nothing is overlooked. Consider engaging:

Accountants: To assist with tax preparation and strategic financial advice.
Bookkeepers: To help maintain accurate financial records.
Business Advisors: For broader strategic planning and growth advice.

8. Celebrate Your Achievements

Finally, don’t forget to celebrate your hard work and achievements over the past year. Take a moment to acknowledge your successes and the progress your business has made. Accounting and Bookkeeping Firms often have a EOFY party. Maybe you should too?

Conclusion

The end of the financial year is a pivotal time for small business owners in Australia. By staying organised, and planning ahead, you can ensure a smooth transition into the new financial year. Embrace the opportunity to reflect on your business’s performance, set new goals, and lay the groundwork for continued success.
Remember, a little preparation goes a long way in making EOFY tasks manageable and even enjoyable. So, roll up your sleeves, tackle those EOFY tasks, and get ready to welcome a prosperous new financial year!