With 30 June just around the corner, small businesses around the country should be getting organised and preparing for the EOFY, but many seem to procrastinate about it.
The recent survey of Australian small businesses found that most small-business owners (69 per cent) prefer having dinner with their in-laws over doing their business taxes. In fact, most would also choose working on the weekend (65 per cent) and cleaning the entire house (58 per cent) over facing their EOFY obligations.
Tax time can seem stressful, but it doesn’t need to be. For the small-business owners daunted by the prospect of wrangling with their accounts, here are five tips to simplify the process:
As a small-business owner, it can be tempting to try and manage every element of the business yourself – including the financials. However, going it alone makes it easy to make unintended mistakes at tax time, making you liable to errors and potential fines.
Consider lightening your load by bringing in an expert – there are over 25,000 registered accountants and bookkeepers in Australia ready to help you lodge your return. A typical registered BAS or tax agent can accurately complete 12 activity statements in a single business day. Experience and expertise makes your life easier.
If you’re keeping your accounts manually (on paper or in Excel) then you are wasting precious resources and ultimately missing out on vital opportunities to run your business more effectively.
There are numerous tools and apps available to help you stay organised and keep your business on track to prepare for tax time. You can try the business tab of the ATO smartphone app for relevant tax information and all the tools you need in one place, while apps such as Squirrel Street, Hubdoc or Receipt Bank remove the burden of receipt-keeping in one simple app.
Ideally, when tax time comes around, you’ll be able to pull out your perfectly kept records, detailing your income and expenses from throughout the year. If not, now is the time to reconcile your receivables, pay any outstanding bills and chase down any payments you’re owed.
Writing off bad or non-recoverable debts means they can be claimed as a tax-deduction, however, in future, you might consider using accounting software with online invoicing to follow up payments and take the hassle (and loss!) out of customers failing to pay on time.
Small businesses are the heart and soul of the Australian economy, but with limited time and resources, many business owners struggle to keep up with changes in laws and regulations regarding their own industry.
Make sure you’re not caught off guard this EOFY – and avoid any serious errors or potential fines at tax time – by staying on top of regulation relevant to your industry. This could be tax legislation or changes to tax deduction rules and limits. The best place to start is with a qualified registered tax agent or speak to the ATO. Google cannot replace a superhero BAS or tax agent.
EOFY is a great time to sit down with your accountant or bookkeeper to take stock of where you’re at and review your finances
Beyond considering whether you’ve met your targets for this financial year, take the opportunity to set your goals for the next financial year and look at ways that you can implement or improve processes and utilise technology to simplify your account keeping for the next 12 months.
Matthew Prouse, Head of Industry, Xero