How ready are you for the end of the financial year?
You can begin to get ready even before the start of June. Start early and ease any end of financial year (EOFY) stress. There are a number of things you can do to be able to lodge your tax promptly and to get ready for the coming year. Here is a checklist for small business owners to help them get ready and minimise end of financial year problems.
Follow ATO rules
There are several EOFY tasks that you must accomplish by the end of the financial year. These tasks are:
- Lodge your income tax return
- Complete your Business Activity Statements (BAS)
- Reconciling your PAYG withholding payment summary report
- Payroll Tax
- Fringe Benefits Tax
Businesses that employ 20 or more people must have migrated to the SuperStream system before 30 June 2015. This system is designed to simplify the sending of super contributions by employers on behalf of their employees. Businesses that employ 19 or fewer people have until 30 June 2016 to comply with ATO requirements.
The financial management of a business is founded on financial software. These days an inexpensive yet powerful, robust cloud-based software service is readily available. You will find this service helpful, especially when the EOFY approaches. By using an online accountancy service, you’ll be able to collaborate with your accountant real time, as well as your automated bank data feed.
The accounts that you have to reconcile include:
- Your bank and investment accounts
- Customers who have hefty unpaid debts
- Your outstanding debts with vendors and other creditors
- Your leased equipment
- Office leases
The internal payroll matters that you need to reconcile include:
- Outstanding leave
- Long-service entitlements
- Other payroll issues that have financial commitments attached
Working capital review
It is important to account for all your stock balances. The perfect time to clear out out-dated stocks with a sale is at the conclusion of the financial year. This is also the right time to review your ordering systems to ease your surplus stock issues.
Small businesses that provide professional services must account for work-in-progress. Find out whether any resources are being held up by individual projects and whether clients are paying bills on time for ongoing work.
Determine the market value of assets
For possible investment opportunities, find out how much is the actual market value of your assets. This information can be useful when applying for bank loans for funding the expansion of your business, or when you want to sell assets that are just idle.
Establish financial performance goals
Were you able to hit your objectives this year? And what targets you want to achieve by the end of the financial year the following year? You can stay on track by putting in place achievable targets for the entire financial year.
Set a cash flow projection
It would benefit you to plan your cash flow in advance. You have to be alert of any possible cash flow deficits so that you will be able to pay your employees and vendors.
If you’re sending out invoices to clients, make sure to find out which clients are failing to pay their bills on time. Keep track of dates when invoices are due, together with other important dates that are related to your cash flow.
Avoid stress when the end of the financial year approaches. Enlist the help of professionals to help you stay on top of the tasks you need to accomplish. PJS Accountants, chartered accountants, provides a full range of services including accounting, taxation, business improvement, superannuation, business valuations, asset protection, succession planning and bookkeeping. For enquiries, contact PJS Accountants.