The checklist all business owners should complete by End of Financial Year.
End of Financial Year (EOFY) is a hectic time for business owners, for a lot of reasons. There’s a lot to keep track of and sometimes important things slip through the cracks. This is where a good old-fashioned checklist can come in handy, to make sure you’re not missing anything important!
EOFY is also the perfect opportunity to review your financial position, your business structure (for business owners), and identify goals and areas you want to grow in the next financial year.
It’s also that time of year when your accountant becomes a bit of a bugbear – but we promise it’s only because we have your best interests at heart.
So grab a coffee (or something stronger), and your calendar, and start ticking off your EOFY Checklist and set yourself up for 2022-23 in all the right ways! You can find our downloadable checklist below.
Things to tick off…
✔️ Record keeping and compliance
As a small business owner, and depending on what kind of professional help you use for your EOFY accounts, you may need to:
- Conduct a stocktake.
- Summarise your record of debtors and creditors.
- Send receipts, documents and records to your tax agent so they can prepare your tax return.
- Review your income and expenses in a profit and loss statement and lodge your monthly May Business Activity Statement (or, check in with your Bookkeeper if they take care of this for you!)
- Check you are up to date on your obligations for PAYG withholding, fringe benefits tax (FBT), Goods and Services Tax (GST), and ASIC Compliance.
- Write off any bad debts in your accounts.
- Scrap any obsolete items off your asset register.
- Ensure any wages paid to your spouse or family members are processed through the single touch payroll system and are considered reasonable for the work performed.
- Ensure any outstanding employee Super Guarantee contributions are received by the fund before 30 June.
- If you are intending to pay any outstanding superannuation contributions relating to employees prior to 30 June 2022 to claim a tax deduction in the current financial year, we strongly advise that you do so no later than Tuesday 14 June 2022.
✔️ Find out what tax deductions you can claim
Do your research and find out what tax deductions you can claim. You may be able to claim deductions on many things, including:
- Business vehicle and travel expenses
- Gifts and donations
- Home office donations
- Self-education expenses
- Tools, equipment and other equipment
- Make sure if you’re looking to claim tax deductions, you meet the following criteria:
- You must have spent the money yourself and not be reimbursed
- The expense must be directly related to earning your income
- You must have a record to prove the purchase and use (e.g. receipts, logbooks etc).
- COVID-19 health and safety equipment
If your accountant takes care of your deductions, make sure you’ve given them all the necessary records, receipts and documents for everything you wish to claim on tax – and confirm that it all fits the right criteria!
✔️ Research tax and legislative changes starting in the next financial year.
1 July is a popular date for legislation changes to take effect, and there may be some changes coming up that you need to be aware of.
These might include changes in tax breaks and deductions for small business. Keep an eye on our blog and in our newsletter for updates to legislation that could impact your tax. You can also talk to your tax agent about any laws that apply to your tax.
Key changes from 1 July 2022 include:
- Super Guarantee charge rate increasing to 10.5%.
- Employers will need to start paying Super Guarantee to employees who earn less than $450 per month.
✔️ Review your goals
Sit down with your accountant or bookkeeper and review how you went achieving your financial goals.
Look at the financial targets set last year – did you meet them? If not, why not? What can you change in the new financial year? What are your goals for the new financial year? What KPIs are you going to use to monitor your success?
Use a cash flow forecast to manage any potential deficits and ensure you can still meet your outgoing cash obligations e.g. staff wages and cost of suppliers, rent etc. If you need guidance on this, you can book financial report meeting with your business accountant.
Then, it’s time to set your goals for the year ahead – these can be financial goals, business goals or personal goals (or a mix of all three). We recommend starting by asking yourself the following questions, and build your goals from your answers:
- What worked well in 2021-22? E.g. Successful price increase, decreased debtor days, used new software that has improve efficiency.
- What do you want to stop doing in 2022-23? E.g. Offering a particular product or service that hasn’t performed well for a while, doing your own bookkeeping, using a certain supplier, working while you’re meant to be on holiday.
- What do you want to start doing in the next 12 months? E.g. Send out client newsletters, monitor your financial performance monthly instead of quarterly, start working out before work.
The best way to stick to goals is to have an accountability partner. And the best accountability partners are the ones with the professional know-how and connections to actively help you achieve your goals.
✔️ Review and update your business and marketing plans
A new financial year is a “fresh start”, and you can take the opportunity to set yourself up for the year ahead.
Go through the following plans and strategies, and ensure they are still relevant to your current business situation:
- Update your marketing strategy and budget.
- Identify new people in your network and new opportunities on the horizon.
- Update your business plan, including your succession plan.
- Review your systems, processes and software and identify what can be improved or changed.
✔️ Review your business structure
As your business grows and as your goals change year-to-year, you may decide that restructuring your business is the best way forward. You might add a new partner, change the ownership of the business completely, or restructure your internal operations.
Changing your business structure can help make the business more profitable, improve processes and efficiency. Making these changes in time for a new financial year will make it easier to measure the benefits of those changes, and doesn’t involve uprooting your entire business in the middle of the financial year.
✔️ Get professional help
A good business accountant can help you with pretty much everything on this list. We can sit down with your in a tax planning meeting or book a business strategy session for the new financial year. Getting a professional to help take the pressure off you means you get to concentrate on all the other things you need to take care of in an average week!
We’re on top of all the changes in legislation, we keep track of deadlines for you, and we also know what areas the ATO are keeping a close eye on. We can make sure you’re compliant, and not at risk in the event of an audit.
If you’re shopping around for an accountant at EOFY, make sure you check your tax agent is legitimate and registered! Cutting corners and costs may land you in a lot of trouble. Of course, we’d like to throw our hat in the ring if it’s not already, so if you’d like to chat to us about whether we’re a good fit to be your business accountant, get in touch today.
Happy End Of Financial Year! (And good luck!)
To get our printable EOFY checklist, click the download button below!
To get our interactive, digital EOFY checklist, click the download button below!
Remember, you don’t have to tackle your EOFY Checklist alone! There are professionals who can help take the edge off at this time of year. Get in touch with us if you’d like to talk about coming on board.
Feeling the stress of EOFY? We have an EOFY De-Stress YouTube playlist just for that!