End of financial year reporting can be a stressful time for small business owners, and the COVID-19 pandemic means there will be additional complexities to manage this time around. With added intricacies this tax-time, business owners are looking for ways to ease the process and take the pressure off.
In fact, our research shows that almost half of small-business owners are feeling more anxious than usual in the run-up to EOFY, emphasised by new rules being introduced around what you need to pay, as well as what you can claim and changes in tax rates and business income.
Having a support network behind your business is crucial. More than half of small business owners surveyed (51 per cent) say they increased their reliance on their accounting advisor to help manage the impact of COVID-19.
Advisors not only provide vital assistance on things like accessing government grants and securing government funding, but they help small business owners understand their entitlements and provide guidance on how to access them. This can free up valuable time, allowing business owners to focus on working on their business like servicing or acquiring clients, expanding into new areas or developing new products and services.
There is a notable element of stress that comes with tax time. When we explored this further with the community, our research showed that over half (57 per cent) of small businesses would have struggled to keep going without the support of an advisor, and 50 per cent said they lent on their advisor for “emotional support”.
Investing in an accountant or bookkeeper is just one-way business owners and operators are helping manage the impact of the turbulent year. Small businesses should also look to use this time to review and seek out innovative ways to streamline processes as a way to gain back time and find some relief.
Building out digital capabilities and making use of software and digital tools is a key way to get on the front foot and give your business an edge. Software can play a pivotal role in helping business owners and operators understand the financial health of their business so they know their claim and deduction entitlements, as well as simplifying key tax-time functions like direct-to-ATO tax lodgements.
With cashflow high on the priority list for so many, digitising and automating processes during this period means that businesses have better oversight of their financials and are less likely to make an error or omission, meaning that tax deductions could be maximised and the speed in which you receive funds increased. While this tax time may be daunting for many small businesses, acting now will help get you on the front foot and improve your tax time experience. Use this time as an opportunity to reset before the new financial year, review legacy processes and consider changes that improve your business operations will have long-lasting impacts for the next financial year.