Hooray, it’s the end of the financial year! Not as excited as me? Well, here are my thoughts on how to make 30 June less stressful:
1. Get a bookkeeper.
A good bookkeeper is an invaluable business tool. You didn’t start your business to do book work — you started it to make money from your passion (unless you are a bookkeeper or an accountant!). If you really feel a bookkeeper is beyond your budget, look at systems like Xero with an add-on like Receipt Bank, which are the next best thing to a bookkeeper. A large part of the angst 30 June causes is from rushing to get their records in order, which leads to my next point.
2. Don’t wait until 30 June to get your records up to date
Make sure you are doing your bookwork regularly – and for most businesses, this means reconciling your bank account at least once a week. To be able to make sound financial decisions in your business, you need to have current financial information; and with modern software like Xero, you can reconcile daily. Even better, refer to point 1!
3. See your accountant before 30 June
By the time 30 June arrives, it’s too late to do any tax planning. Most costs, to be deductible, have to be paid or at least incurred before 30 June. Get your accountant to have a look at your books after you’ve done the March BAS to give you an idea of what your tax liability will be. Some other things to remember:
- For superannuation to be deductible, it has to reach the hands of the super fund trustee by 30 June. Therefore, plan to make any superannuation payments by 23 June to make sure it is in the “super” fund by the EOFY.
- If you use a motor vehicle in your business, make sure you write down the odometer reading on 30 June. For a logbook to be valid, it has to include the odometer reading on 30 June each year.
- If you are looking for extra deductions, consider pre-paying things like insurance and rent.
- For those who have staff, the super guarantee charge increases to 9.5% from 1 July so don’t forget to factor the increase into your budget.
Finally, don’t stress if you haven’t gotten your books up to date for the tax man. If you use a tax agent and have lodged on time last year, you have at least six months until you need to lodge your tax return. Isn’t that nice of him? Apart from avoiding the stress of the EOFY, the real reason you should have your books up to date is for the sake of your own business. And if you plan ahead for 2015/16, you could be as excited as me about the next EOFY!
