The end of financial year is an important time for business owners to get organised, complete bookkeeping and plan ahead. Use this checklist to prepare, work smarter and set yourself up for the upcoming financial year.
Accounting is a process that can be very complex. However, it can be made less stressful and less time consuming by creating a checklist to ensure all aspects of the process are completed correctly and on time.
Obligations to your staff
As a small business owner it is your duty to keep your employees happy and healthy, both at work and home. Luckily there are many tools and tricks available to help you achieve this objective. A top notch employee benefits package is the best way to go for both new and existing staff members. It is also a good idea to review your compensation policies at least once or twice a year for a refresher course in best practices. Having well-crafted policies in place and sticking to them will be rewarded with employee satisfaction and retention, two of the most important components of any business.
One of the best ways to ace your employee benefits package is to use online tools that provide a single source of truth for all employees and their pay and conditions. The easiest and most effective way to accomplish this is through Single Touch Payroll (STP) technology. This software platform can be found at an affordable price on the internet and can be utilised by all sizes of business from the sole trader to large multinational conglomerate. It is a proven winner and the most cost effective way to manage employee benefit claims and ensure compliance with tax laws for your small business.
*Remember that from 1 July 2023 the Superannuation Guarantee increases to 11%
Complete an end of financial year stocktake
If your business sells or produces stock, you may need to do a stocktake at the end of financial year. This can be a daunting task, but it is important to complete to ensure you have accurate data for maintaining your inventory records.
Stock takes can help you identify and reduce stock that is carrying too much, causing excess inventory levels or isn’t selling well. They also help you spot items that aren’t recorded properly or are vulnerable to damage, theft and tampering.
As part of your stocktake, you’ll need to count each item of trading stock and make a “reasonable estimate” of its value at the beginning and end of the financial year. This can include cost price, market value or replacement value.
Tax Planning for the upcoming financial year
One of the most important tasks that an Australian Small business owner needs to do is tax planning for the upcoming financial year. This is because it helps you to save time and avoid errors during the year.
It also allows you to make the most of a number of tax breaks available for businesses. These include small business CGT concessions, research and development tax credit and temporary full expensing for qualifying assets.
As a specialist small business accountant we help you to understand these tax benefits and how they could apply to your business. They can also advise you on how to use them properly.
A tax planning session with our team overs more than just tax minimisation. We want to help you start the new financial year on the best foot possible. To see more information have a look at our blog on tax planning and book your appointment through our website.
Get paid and pay any debts
Getting paid is no mean feat, especially when you're one of the lucky few who make a living as a freelancer or sole trader. Having the right tools and techniques in place to help you manage your cashflow, while also being aware of any legal or regulatory changes that could affect your operations, will ensure that your business is on the right track.
It is important for Australian Small businesses to be aware of the impact of late payments on their business. It is estimated that around 40 percent of businesses struggle to make ends meet due to late payments, a figure that could be much higher if the businesses are not aware of these issues. In fact, the level of late payments to small business has been on the rise over the last few years.
The first thing to do when dealing with late payments is to try and minimise them as much as possible. This may mean setting reminders to customers that they have overdue invoices, or even putting a process in place where the customer can pay their outstanding debt with a payment plan.
If you are continually having difficulties in getting paid, you may need to look at your terms of agreement as well as any engagement letters. This is something you can discuss with our team at your tax planning session, by letting us know in advance. Or through a business coaching session that can also be made through our website.
Do not forget that you should review all of your accounts payable and make any necessary payments by the end of the financial year.
Review and revise polices and business systems
Policies are an important part of your business and should be reviewed and revised regularly. They help your staff perform their duties, save time and resources, and minimise risk of legal expenses or fines.
Policy review doesn’t have to be a huge project. Sometimes, you may only need to make a few tweaks. Best still you can allocate some of these policy review to your team so that the updates are staff friendly and morale boosting at the same time.
It is also a good idea to conduct regular audits of your policies to see how well they are understood. This will give you a chance to find weaknesses or holes in your policies, before they cause an issue in your company.
Systems that you may consider reviewing may be your inventory systems, accounting software package and other areas that may get overlooked until you need it like your onboarding of new staff.
This is not a comprehensive checklist but it is a great starting point to getting yourself and your business off to a great start, come the new financial year.