The end of the financial year (EOFY) is an important time for your business. You'll need to complete bookkeeping, tax returns and plan for the new financial year. Use this checklist to prepare, get your business organised and work smarter in the year ahead.
Tax Planning Ahead of 30th June
Your tax return will only be as accurate as your financial records. You want it to be spot on
to take advantage of any tax deductions.
Take time to review your records, ensuring you have all receipts (invoices) before you meet with your tax advisor. By doing this ahead of time, you can avoid the last-minute rush.
Some 2023 Tax Strategy tips from Karen:
1. Is the depreciation (instant asset write off) that isn't showing on profit and loss yet.
2. If cash at bank is able to do this; prepay some expenses before 30 June 2023
3. Purchase any other equipment items that you can if cash at bank is allowing you to do so.
4. Make additional personal super contributions to your own super account if you can do so. (personal superannuation contributions are a tax deductible expenses for your own individual tax return)
Hey Employers: Pay Employees in the Correct Financial Year
It’s really important to pay your employees – same as you would normally, don’t miss any or pay them late into July.
Did you know? - that the day you physically pay them (the money leaving your bank) determines which financial year the income applies to, the dates they actually worked don’t play into it.
Example here:
Jane pays her employees on Wednesday 5th July, she can't bring that payrun forward to Thursday 29th June or Friday 30th June because she has some cash to burn or she thinks that she can do with some extra expenses for the financial year!
Please be careful!
Jane pays her employees weekly and by doing the above action, she just might jump them into a higher tax bracket then they need to be.
It is complicated so please be aware!
Hey Employers: Pay Employees Superannuation Guarantee by 30th June 2023
If you want to claim your employee superannuation for the April to June Quarter in the 2022-2023 financial year you’ll need to make your payments on or before 23 June 2023. This allows processing time for the payments to be received by your employees’ super funds before the 30th of June.
You are entitled to a full tax deduction for any Superannuation Guarantee or award super payments you make on behalf of your employees if the contribution is made to a complying super fund or a retirement savings account (RSA) for their benefit. The contributions are only deductible for the year in which they are made.
To qualify for a tax deduction on your SG contribution payments, make the payment to their nominated super funds by the quarterly due dates, as follows:
Important: While the 28th of July 2023 is the next quarterly due date for super guarantee payments, the ATO advises employers to submit payments and instructions by 5:30 PM on 23 July 2023 to allow for normal processing times and system maintenance.
Reconcile Bank Statements, Payroll & GST
Accurate records will enable you to identify any discrepancies and resolve them before they turn into bigger problems.
Reconciling your bank statements, payroll, and GST is an essential step in ensuring that your finances are in order.
And if you do it now, you can fix any issues before the 30th June.
Update Business Records
It’s also a good idea to review and update your business records. Ensure employee information is up to date including any personal details or changes to their employment status. Run through your contacts, subscriptions and expenses and clean up what you need to.
Taking the time to do this now will help to ensure that you’re starting the new financial year with accurate and up-to-date records.
Review Your Business Structure
As your business grows and expands, you may decide to change your business structure, or to restructure your business. The compliance and taxation regulations differ depending on your business structure.
EOFY Stocktake
EOFY stock takes are essential and unfortunately, can take a lot of time. Run an inventory report and review your stock levels against your digital records. It’s important to ensure that any damaged or obsolete stock is accounted for and that your records are spot on.
What is a stocktake?
All businesses must account for the value of their trading stock at the end of each income year (closing stock) and at the start of the next income year (opening stock).
Trading stock is anything your business acquires, produces or manufactures, for the purposes of manufacturing, selling or exchanging.
A stocktake involves counting and checking all products, goods or inventory in your business to make sure your records are accurate and correct.
A stocktake lets you work out the value of your trading stock at the end of financial year for tax purposes.
If you're a small business with an aggregated turnover of less than $10 million a year, and you estimate that the value of your trading stock changed by no more than $5,000 in the year, you don't have to:
* conduct a formal stocktake
* account for the changes in your trading stock’s value
If your business holds stock, consider reviewing your stock valuation and writing off any stock that’s damaged or obsolete.
Completing a stocktake is done closest to the end of the financial year and keep in mind that stock can be valued at either cost price or net realizable value (its expected selling price), whichever is lower.
If you have never done a stocktake...best get stock taking ASAP! to create a snapshot of an opening stock record!
Then you’ll be stocktaking again as close as you can to 30 June - End of the financial year.
Preparing for EOFY is crucial for small business owners. Following a comprehensive checklist can help ensure all essential tasks are completed on time. From tax planning and stocktake to reconciling bank statements and reviewing profit and loss, every task is important.
Get your business organised and work smarter in the year ahead.
Need a hand getting your books EOFY-ready?