- May 31, 2022
- Comments: 0
- Posted by: user
June the 30th is the last day of the financial year in Australia. That means it’s time to take stock of the year (literally and figuratively). But it’s also the perfect time to get ready for the next financial year.
The way to look at it is to prepare for yourself a report that you will use for your taxes but also to get an idea on how well the business did over the last year. And take the opportunity to do better next year.
Yes, COVID and the fallout after COVID has distorted everything. But that’s even more reason to work out what can be done more efficiently in the future. The list below is not exhaustive. Every business is different and you really should consult with your accountant as they know your particular circumstances.
So what should you do before the financial year ends?
Do a profit and loss statement
(So you understand where money is coming in and going out. This should include what money you owe – as well as what money is owed to you)
Conduct a stock take
(You should be keeping records of all transactions so you know what you are spending money on – and how much profit that it is generating for you. But also, you need it to claim on your tax return. The ATO have a handy guide for this which you can read HERE.)
Record a summary of all expenditures on improving the business and asset purchases
(You’ll need this work out depreciation you can claim on tax and for capital gains tax).
Research what tax deductions you can claim
(Basically, what expenses did the business incur in order to run the business and make a profit? But this is one area you really do want your tax agent to go over. There are a whole lot of things you can claim for. Some are specific to certain industries and many of them have particular requirements in terms of record keeping and the like – so get help AND do your research).
Wages and Single Touch Payroll (STP)
(STP is a requirement now for pretty much every business. It’s worthwhile to check it’s all OK and perfect for next year. You can contact the ATO and find out they have – as opposed to what they have. Don’t forget, you have to finalise for all of your employees so they can do their income taxes).
(It is very important that you have met all your requirements for the year).
Prepare your yearly reports
(The obvious one is your income tax return but some others might include:
- Pay As You Go Withholding (as mentioned – this will include the finalisation of your employees income for the year).
- Goods and Services Tax.
- Fringe Benefits Tax.)
Review what you did right and what you did wrong last year
(Then use that to plan your business and marketing for next year. Think about what new things the business is going to have to adapt to and ways to work smarter instead of harder)
Go paperless! Please do this!
(If you are one of those businesses that still do everything on paper. Be certain to scan and digitise everything and then back them up remotely. This makes everything so much simpler for yourself and your accountant but also just for safety’s sake. Every record the business has should be backed up somewhere else. Floods, bushfire or office disasters are always possible. So be prepared. If you lose all your records you are well and truly stuffed).
WARNING! BE VERY WARY OF TAX SCAMS!
Scams aimed at businesses are at an all time high. Tax time is the ideal time to strike for these bottom feeders. BE CAREFUL! Check with your tax agent before doing or agreeing to anything. If you get a call from the Australian Tax Office – get a reference number and then call back on a number you get from their website (not phone numbers they give you) and ask to be put through to the agent involved.
If you have any questions about all of this – give us a call on 1300 268 800!