Get Your Business Ready for the End of Financial Year

Get Your Business Ready for the End of Financial Year
Preparing for the EOFY can feel like a daunting task, but it’s a great opportunity to plan for the future.
by Square May 06, 2019 — 4 min read
Get Your Business Ready for the End of Financial Year

Preparing for the end of financial year (EOFY) can feel like a daunting task but it’s also a great opportunity to plan for the future.

Finalising your bookkeeping and tax returns allows you to take stock of your business’s financial position and make better decisions for the next financial year.

Here’s what you need to know to get ready for EOFY and set up for success for FY 2020-.

What are the key dates I need to know for EOFY?

The end of financial year is 30 June so most of your EOFY activity will land in April, May and June. A detailed timeline of tax return activities can be found at the Australian Tax Office (ATO)’s Due Dates web page so you can determine the dates relevant to your circumstances.

A few things to note:

Record keeping is key

These are the bookkeeping tasks that need to be completed by June 30:

Professional help makes a difference

Tax Advisers

Consider working with a tax adviser to get the correct information consolidated and lodged by the due dates. Advisers can also sit down with you to review your cash flow and stay on top of any changes in tax laws. If you don’t have an adviser, subscribing to ATO’s publications is a good way to keep across any changes.

Make sure your tax agent is registered with the Tax Practitioners Board (TPB). Using unregistered tax or Business Activity Statement (BAS) agents is a business risk.

Accounting software

Using a POS like Square will help you keep track of your sales data throughout the year and accounting software like Xero is invaluable in keeping your bookkeeping in order. If you’re not already, it’s worth assessing the software options and going digital. Square neatly integrates with MYOB, Quickbooks and Xero among others.

Watch out for tax refund scams

Scammers target small businesses at tax time so keep your wits about you when you see claims like:

Note the ATO will not email you asking for your bank details or tax file number (TFN).

Tax deductions

You can claim deductions for most of your business expenses if they relate directly to earning your assessable income.

The ATO has three golden rules for claiming your expenses:

If you’re a sole trader you claim business deductions in your personal tax return. Read more about the tax differences between business structures here.

What you can claim

You can generally claim:

Some things you can claim include your website, travel expenses, phone and internet expenses, tools and computers.

The ‘incur date’ of the expense is when you’re legally obliged to pay it. Note that capital expenses should be adjusted for the portion of the year the equipment (like a car) is used for the business.

What you can’t claim

The following can’t be claimed as a deduction:

Claiming a deduction for a pre-paid expenses

If you pay an expense in advance (where you pay for something that you won’t receive until the next financial year, for example) you usually need to divide up the expense across the whole service period. That’s if the expense is $1000 or more and you either won’t receive the goods or services in full within 12 months or it’s not eligible for immediate deduction. Read more here.

Protect your business

If your business circumstances have changed throughout the year, now’s a good time to review your insurance options, including level of cover. An insurance broker can help get you the level of cover that suits your business and for the best price. As well as compulsory insurance, including worker’s compensation and public liability, there’s other types of insurance that you may need to consider.

Your strategy for next year

When you have all of your financial information together, you can step back and review the position of your business. Some things you can consider doing:

If you are unsure about your end of financial year obligations, visit the ATO’s website or call 13 28 66, or talk to your tax adviser.

*Nothing in this article constitutes tax advice. If you have specific questions on filing your taxes, please consult a professional. *

Related articles

How to Manage Your Business Costs Effectively
How to Calculate Break Even Point and Apply It to Your Business
A Guide to Australian Business Numbers (ABNs)

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