A money coach shares 11 EOFY tips for small business owners

The end of the financial year is upon us, but how do we make it as stress-free as possible? Now is the time to start cleaning your money house and you have a few more weeks to get to it. With some planning and preparation, it doesn’t have to be taxing, to use an old accounting joke. This EOFY checklist may help you meet your legal obligations and help your small business get ready for the upcoming tax season. So read on and get ready, and you won’t need to fear the year of the financial year.

Clean house

Not literally, but as in getting your records and paperwork up to date. Having important paperwork in place helps to streamline the process. I suggest set aside time to collate your documents and spare yourself a stressful document hunt.  Some examples of records you need to organise for the end of the financial year include:

• Receipts for sales and business purchases
• Receipts for work-related expenses
• Records of tax returns
• Business Activity Statements
• GST returns
• Employee super contributions

Most business purchases can be accounted for in your bank account, however, it’s always a good idea to have receipts for larger expenses in case the Auditor comes knocking. If you’re not sure what’s claimable, collate the receipts, print your bank statements, and book a chat with your accountant or tax agent.

The kiss theory

Keeping things simple is always going to make life easier and one of the greatest ways to do this is with a great online accounting tool. Xero and MYOB are two great online tools that can be connected to your bank accounts and make life much simpler. You can also give your accountant and bookkeeper access. 

Always separate your personal banking from your business banking. This helps capture all business expenses in one place while avoiding the risk of accidentally claiming for a purchase that’s not connected. A separate business bank account also helps manage your business cash flow whilst allowing you to also build your own personal wealth. If you’ve built your business to a stable cash flow, now’s the time to start paying yourself a regular wage, and don’t forget super! 

If you’re registered for online banking, you may have access to tools that will assist you with everyday bookkeeping and gathering information for your tax return. For example, Westpac’s online banking offers:

• Third-party access to bank accounts – including a ‘view only’ option – to let you share cash flow information with your bookkeeper or accountant.
• Connectivity to your accounting software or third-party service providers (such as MYOB and Xero).

Deductions My Dear Watson!

Want to know how to save on business taxes while fulfilling all your tax obligations? It’s simple. Deductions. They allow for the reduction in the portion of your income liable to be taxed. As a small business owner, you must make the most of the existing tax regime to ensure that no deduction you’re eligible for is left unclaimed. It just makes good business sense to get the right deductions so it’s important to be aware of what you can claim. 

As a business owner, you may claim tax deductions for most business expenses. For example, interest and fees on your business loans, and other related expenses. Remember that you must have records to prove the expenses. If you are employed, you will find that there are listed items you can claim depending on your industry and position.

It’s never too late

As we’ve not yet reached the EOFY it’s not too late to generate some additional tax deductions this tax year. If you have any professional subscriptions or union fees due, pay by June 30 and you can claim the deduction for the whole amount this year.

Remember, charitable donations are tax-deductible (anything over $2), with a receipt, paid to a charity registered as a deductible gift recipient (which covers most major charities).

Super is super! Like really super

Businesses with superannuation guarantee (SG) obligations are required to pay employee contributions. Meeting your obligations by 30 June 2023 may allow you to claim a tax deduction in your 2023 income tax return, where the contributions are made to a complying superannuation fund or a retirement savings account for the purpose of providing superannuation benefits for your employees. 

The due date is ticking

That’s right, time stops for no man and neither do due dates so beware. Put all the required dates in your calendar to give yourself a reminder that will help you avoid ATO penalties. 

The Australian Taxation Office levies penalties and fines on delayed tax filings, and for SMEs, this may prove to be disastrous. Set frequent reminders throughout the month of June to keep yourself on your toes and complete the tax process before the 30 June deadline to avoid fines.  

Hire an expert

While SME owners and salaried people may be tempted to handle the entire tax process on their own, there are many benefits to hiring an accountant or a bookkeeper. Outsourcing the process of tax compliance to an expert will not only save you a lot of time but will also ensure that the process is free of errors that might attract costly fines and penalties in the future. 

Think ahead

If you’re lucky enough to receive a rebate think about paying down debt (if you have any) or setting some aside for savings. If you end up with a tax debt, call them, make a plan, and set up a regular payment plan. It’s never a good thing to ignore. So don’t! Because the next BAS statement date will roll around and before you know it that debt will just accrue, so be proactive and don’t be afraid of the ATO. The agents are friendly and helpful.

Check, check, and check again

Do a systems check to help you organise your files, payments, expenses, and receipts. Did you know that the ATO has a deductions app called ATO MyDeductions that helps organise receipts? You might like to download it and give it a go. Now is a great time to take a few hours out of your day-to-day activities to review your systems, look at allowances, deductions, leave, and super and ensure everything is working as you would expect. 

Looking to the future

It’s a great time to look ahead and plan. Think about your goals for the next 12 months. What do they look like financially? Set your intention, write it down, make a plan and don’t be afraid to put that in writing in a visible spot in your office to keep you on track.

Reflection breeds perfection

Those who take some time out for reflection do better – with everything. So take a deep breath and reflect:

• What have you done well in the last six months? 
• What deserves to be celebrated?
• What’s your leading edge? 
• Where are you shifting to?
• What lessons have you learned? 
• How will you implement those learnings?
• What will you do differently in the next 12 months?
• What can you do better?

Now write it down. 

1. Get your paperwork up to date.
2. Simplify accounting with online tools.
3. Manage your deductions.
4. Meet your superannuation requirements.
5. Be aware of due dates.
6. Hire an expert.
7. Be smart with your tax refund or debt.
8. Do a systems check.
9. Plan for the year ahead.
10. Take time to reflect.

And in 12 months I want you to pull that list out of reflections out. You might just be surprised at how well you have done! 

Virginia Baker-Woolf is a money coach and the founder of The Women’s Money Project.