End of Financial Year (EOFY) is coming and we only just finished the Christmas holidays! It’s time to start getting things in order for the end of one financial year and the beginning of another. Here’s a few things that you as a business owner can start doing to prepare for EOFY.
Not enough business owners undertake annual tax planning with their accountant. Now is the perfect time to line up a meeting with your accountant (you should be having them regularly anyhow….) to discuss your financial results, how much tax you’ve already paid and what tax you can expect to pay or receive back when you lodge your returns.
Putting money into super is always a favourite ‘go to’ strategy for reducing your tax bill, which is great if you can afford to be without that cash in your business and it’s the right thing for your personal circumstances (worth discussing with your financial advisor).
The $20,000 instant asset write-off rules for small business ends as at 30 June 2018; if you have something you need and want the instant tax benefit, now’s a great time to consider that investment.
Start working on your 2019 Budget
Every business should put in place a financial year budget. Not sure what a budget is or how it might benefit your business? Read our post about the importance of budgets, KPIs and regular reporting.
Start working on this across April & May so that it’s locked in and everyone agrees on it well before the end of June.
Review your structure
This doesn’t mean you necessarily need to get your accountant & lawyer in the same room – but have a think about your personal & business circumstances and consider if your existing structure is still ideal.
Is your business seriously growing and now too big for operating in a family trust? Or is there plans to grow so it’s worth thinking about now? Perhaps you’re a sole trader who’s recently gotten married or starting a family.
If your circumstances are changing – consider if your business structure is still right for you. If you think it may not be then ask the question of your trusted advisors.
Review your systems
EOFY provides a fresh start and there’s no better time to consider changing/upgrading your software tools than at the start of a new financial year. Software is changing quickly and what was the best 5, 3 or even 1 year ago may not be the best today.
Consider pay increases for your staff and check changes to award rates
EOFY is typically the time of year where award rates are adjusted and it’s important that from a payroll perspective you’re across these changes so that your staff are paid at the correct rate.
For full time or permanent part time employees you’ll typically be undertaking their annual performance review, and this usually involves a discussion around salary. Be prepared to expect at least a CPI increase for those that deserve it.
Review your pricing
Unless you’re achieving greater efficiencies/utilisation or reducing your overheads, pay rises for your staff will certainly impact your bottom line.
Assuming that’s not the case then now is the time to review the rates your charging your customer for goods and services and adjust accordingly, market permitting.