Just like the holiday season, the end of financial year (EOFY) seems to come around before you know it. But – unlike the holidays – it can bring an unnecessary sense of worry. When I speak with small-business owners, plenty of them tell me about the stress that accompanies the EOFY and preparing their tax returns.
With the right approach however, EOFY can instead be a fantastic opportunity. Not only is EOFY a great prompt for you to review and improve your business’ finances, but it can also be an opportunity for you to future-proof your finances for the next year.
If you didn’t put out an EOFY check list last year, start putting one together, and give your accountant a call. Find out what tasks need to be done before tax return time, and start streamlining your process now. Clayton Oates, accountant and founder of Q&A Business, encourages small businesses to do just that. “By establishing a checklist and important steps to address, we not only save time, but make sure nothing slips through the cracks,” Clayton says. “EOFY becomes a structured routine when we know what’s ahead and what we can tackle together.”
While EOFY is a retrospective process, don’t only focus on the end of this financial year – approach it with a mindset towards what you can do to add value to your business in the new financial year. Our Financial Fitness study found that only 12 per cent of business owners believe they have a thorough understanding of their business’ finances; take EOFY as an opportunity to study your data, and use it to identify potential growth areas. Your accountant isn’t just a number cruncher – they’re a valuable advisor who can flag areas ripe for development, and help you build greater success in the new financial year.
The shift to digital is gaining momentum, and many Government bodies are leading the charge. With new and evolving legislation and regulation, it’s important to keep up-to-date with changes to data automation rules and procedures. A case in point is SuperStream – the way businesses must pay employee superannuation guarantee contributions to super funds. Even though this became mandatory for employers with 19 or fewer employees from 1st July 2016, research found around a third of employers still don’t know about SuperStream or how to use it. While cloud accounting can make staying compliant with new legislation easy – as well as simplifying processes like lodging BAS through an app – giving yourself time to review legislation and regulations with your accountant will streamline the EOFY process.
Einstein has been quoted as saying “if you want different results, don’t do the same thing”. If you want EOFY to be an easier ride next year, don’t keep using the same methods! Consider adopting cloud accounting, for example, so you can update your finances on the go. Australia has seen strong uptake of cloud accounting and finance apps, but some businesses are still overlooking this technology and the efficiencies offered. Transactions are always up-to-date and available as they happen, payroll is automated, debtors and creditors can be easily tracked, and invoices are captured in real time. This can also supercharge your relationship with your accountant.
While EOFY can be daunting, following these tips can make sure you not only streamline your finances, but make the most of the process. Think ahead to the future, and enter FY19 with your best foot forward.
Nicolette Maury, Vice President and Country Manager, Intuit Australia