End of Financial Year Tips | Wilson & Assoc Chartered Accountants

End of Financial Year Tips

As year-end approaches, there is a small window for small businesses to get their finance in order, optimise their tax and plan for the next year.  In this article, we take a closer look at five things you can do to get your finance and tax in top gear.

1. Get your books and payroll up to date

The first step is to ensure that your books and payroll records are up to date, in order to establish a true and accurate picture of your finances, and as a consequence, your taxes.

This means reconciling your bank accounts, credit cards, and loans, getting your receivables, payables, payroll, super and PAYG up to date. Make sure you are STP2 compliant and have all pay runs filed with the ATO. 

Getting your books up to date is essential for all subsequent steps, and most importantly for maximising tax deductions and concessions.

2. Collect overdue receivables

Year-end is a good milestone to clear the tabs, particularly with slow payers. Consider offering payment plans in affordable lot sizes to help alleviate cash flow pressures.

3. Proactively manage payables

Many businesses delay updating their accounts and tax lodgements for the purpose of deferring payments.  These are in fact 2 separate functions and should be done in 2 separate processes.

Firstly, ensure that you meet all compliance requirements by getting your PAYG taxes and Super liability up to date so that you don’t trip late lodgement penalties. 

Separately, pro-actively manage your debts by arranging payment plans with the ATO and suppliers.

Creditors, the ATO included, are usually more reassured and open to payment plan proposals just by your initiatives and proactiveness.

It is absolutely critical to honour payment plans to maintain your creditability. For that reason, you need an accurate cash flow projection and only commit to a payment plan you can support and sustain.

4. Maximise tax deductions and concessions

Make the most of tax deductions and concessions by reviewing your business expenses and identifying items that are tax-deductible. Take advantage of temporary full expensing of assets to minimise your tax liability.

5. Set goals and budgets for next year

Adapt business strategy, define annual milestones and goals, and develop next year’s budget.

The end of the financial year is an opportunity to reassess your business strategy, define annual milestones and goals, and develop a budget for the upcoming year.

This will help your team stay focused and accountable for your business’s financial performance.  Ideally, this process is started with Q3, i.e., from April to allow time for realignment and consolidation of the various parts of your plans, as you progress through your planning process.

It is recommended that you enlist the help of your External CFO, with specific attention and priority for time-sensitive activities, for which you have a limited window to execute. For example, determining whether and how much to pay dividends, bonus and director fee must be done prior to July 14.

If you need any assistance, you are most welcome to reach out at any time. We will be pleased to help.

Disclcaimer: The information provided within this article is general information only.  None of the comments in these notes are intended to be advice, whether legal, financial product or professional. You should obtain specific advice regarding your particular circumstances from a tax or legal professional.

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About Wilson & Assoc

Wilson & Assoc Chartered Accountants provides taxation and business advisory services to individuals, investors and businesses wherever you are based. We provide specialist services to startups and health care providers.

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