- June 29, 2025
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The end of the 2024 – 2025 financial year is about getting ready for next year as well as ending this financial year. Whether you’re a sole trader, partnership, or company, here’s a practical guide to help you close out the financial year and step into a successful 2025–26 FY.
1. Reconcile Your Financial Records
Ensure your books are up to date. That means checking bank statements, invoices, receipts, payroll, and superannuation contributions. Cloud-based tools like Xero, MYOB, or QuickBooks can make this process much smoother.
2. Maximise Deductions
Take advantage of the instant asset write-off for eligible purchases under $20,000 (for businesses with turnover under $10 million) if installed and ready for use by 30 June. Prepay expenses like rent, insurance, or subscriptions to bring forward deductions.
3. Review Payroll and Superannuation
To claim a tax deduction for superannuation payments in the current financial year, ensure all employee contributions are received by their super funds by June 30th. Account for processing times and aim to make payments by mid-June. The Super Guarantee (SG) rate increased to 11.5% from 1 July 2024 and will rise to 12% from 1 July 2025, so factor this into your calculations. Also, reconcile PAYG withholding and leave entitlements.
4. Conduct a Stock take and Asset Review
Clear out obsolete stock and update your asset register. Chase up any outstanding invoices from customers to improve your cash flow. Write off any bad debts or unused assets to clean up your balance sheet and to claim deductions.
5. Prepare Financial Statements
Generate your profit and loss, balance sheet, and cash flow reports. These not only support your tax return but also give you a snapshot of your business’s financial health. The year just gone can tell you what can be done better the year coming up.
6. Know Your Lodgement Deadlines
- 14 July: PAYG summaries due (if not using STP)
- 31 October: Tax return due for sole traders, partnerships, and trusts
- 28 February 2026: Tax return due for most small companies
7. Gather Records: Make sure to organise and store all your invoices, receipts, bank statements, and any other relevant financial documents. The ATO requires you to keep records for at least five years. Digital record-keeping tools and apps can be a lifesaver here.
How to Prepare for the New Financial Year
1. Set Clear Financial Goals
Use your EOFY reports for this year to set realistic revenue, expense, and profit targets for the new year. Consider cash flow forecasts and seasonal trends as well as national and international events that may impact your business.
2. Review Your Business Structure
Is your current structure still the best fit? As your business evolves, it might be time to consider switching from sole trader to company or trust for tax or liability reasons. Talk to your accountant. The beginning of the financial year is the best time to do this.
3. Refresh Your Budget
Update your budget to reflect new goals, upcoming expenses, and any changes in supplier costs or staffing. Use last year to guide you for next year. Always include a 10-20% safety margin in your budget for unexpected costs or revenue fluctuations. Spend some time and talk to your accountant about the lessons to be learned form last year.
4. Automate Where Possible
Streamline admin with automation tools—think invoicing, payroll, and inventory management. This frees up time for strategy, work and growth. Online accounting programs like Xero and MYOB will save you time and money. The many new AI tools coming on the market will do the same.
5. Stay Compliant
Keep up with changes to tax laws, superannuation rates, and reporting requirements. Subscribe to ATO updates or work closely with your accountant.
6. Invest in Your Team and Tools
EOFY is a great time to review training needs, upgrade equipment, or invest in software that boosts productivity.
7. Technology Review: Assess the tools and systems you already use. Are there opportunities to upgrade, switch, or consolidate software to improve efficiency or save costs? Consider cloud-based accounting software (there are good reasons we are repeating this!), receipt-scanning apps, and other digital tools to streamline your record-keeping and financial management. As mentioned, AI tools are becoming available for even the smallest and most niche businesses that really help your bottom line.
8. Professional Advice: Don’t go it alone! Engage a registered tax agent or accountant. They can help you:
- Navigate complex tax laws and ensure compliance.
- Identify all eligible deductions and concessions.
- Provide strategic tax planning advice.
- Review your business structure.
- Offer insights into improving your financial performance.
Good luck and success with the new financial year!