Monday, 3 Jun 2024
As we move closer to June, the fear of the end of the financial year (EOFY) looms large over businesses in Australia. This time is highly significant for bookkeeping purposes because businesses have to file tax returns, and forecasting for the next financial year must be initiated. It is the best phase to streamline workflows, increase productivity, and stay on top of the books. Since compliance is an important part of this activity, entrepreneurs must use an EOFY checklist to keep things on track.
Following a step by step process ensures entrepreneurs do not miss out on important details and adhere to regulations. It reduces the anxiety related to tax season and plan for the future effectively. So, here is an end of financial year checklist for your business to stay on the right path. It ensures the business keeps its finances organised and is ready to deal with cash flow challenges.
One of the first things entrepreneurs must focus on at EOFY is completing all annual tasks, such as organising financial reports and documents, lodging income tax returns with the help of your Melbourne bookkeeper and lodging returns for PAYG Withholding, Fringe Benefits Tax, and Goods and Services Taxes. They must also ensure they are complying with the superannuation requirements.
In addition, keeping records of all expenses related to procuring assets and improving the business to determine depreciation expense claims and capital gains tax is essential. The business owner should have a document summarising income, expenses, and current stock and assets. They must also have digital records of all the documents.
Business expenses can be claimed as tax deductions to bring down the tax bills. An expert bookkeeper in Melbourne can help you identify the costs to be claimed. These expenses are made to earn an income and not for personal use. The entrepreneur must have the bills of these payments, such as vehicle purchase, travel for meetings, equipment repair, salaries and wages, etc. The tax laws can change, and you should keep track of these amendments to calculate taxes correctly.
Lodging business activity statements (BAS) is mandatory for businesses registered for Goods and Services Tax (GST). Entrepreneurs must lodge the BAS and make payments by the due date or ask their BAS agent to do so. The lodgements must be evaluated for accuracy.
If your business employs contractors and subcontractors, you must lodge the Taxable Payments Annual Report (TPAR). Industries required to lodge the report include building and construction, IT services, cleaning services, courier services, etc.
Since tax season is around the corner, businesses are vulnerable to getting scammed. Two of the prominent tax scams are tax refund and tax owed scams. In the tax refund scam, the defrauder makes the entrepreneur believe they have overpaid their taxes and can get a refund by paying a fee.
In the tax owed scam, the fraudster makes the entrepreneur believe they have underpaid their taxes and need to compensate. They ask for credit card details or other financial information that can lead to significant losses. Thus, it is vital to stay vigilant and let your bookkeeper in Melbourne handle your taxes.
Entrepreneurs must use the EOFY period to review their finances with the help of the bookkeeper. They should check whether the financial goals for the year were accomplished. They should use the financial data to assess the business’s strengths and weaknesses.
They must determine the cash flow challenges and how they can be improved by introducing new policies and adapting operations according to the latest trends. They should also determine the marketing strategies and budget for the next year while identifying ways of improving operational efficiency.
The EOFY period is the time to report the payroll tax and super using the Single Touch Payroll to automate the process. Since the information must be provided to the ATO, it is vital to comply with the reporting guidelines.
Employers must reconcile the payroll and provide income statements to employees with the correct assessment of fringe benefits and salary sacrifice superannuation contributions. The super guarantee contributions should be met by this time to cover the outstanding payments.
The new financial year is an opportunity to start afresh and eliminate the problem areas to progress quickly. It is also the best time to implement changes in the organisation. For example, if the business is growing and you want to expand, you can opt for a business structure. The tax liabilities for your business will change accordingly. Thus, it is best to do this at EOFY.
Also, check if there are any changes to National wages and increase your employees’ salaries accordingly. Your Melbourne bookkeeper can help you with tax planning and budgeting for the next year while forecasting cash flow. It is also the right time to update accounting software and alter product pricing if required.
EOFY may be difficult for business owners because they must investigate financial matters deeply. However, it should be viewed as a period of improvement and restructuring that can help transform and grow.
