End of financial year is often a busy time for carpenters. Summer business may be wrapping up, but you’ve no doubt got a full calendar of projects by the time the 31st March deadline comes around. While it might feel like there’s not a moment to spare, taking the time to review your carpentry business now could make a lot of sense.
EOFY is when you’re balancing your books and getting organised for the year ahead. All this work can give you a good idea of how healthy your business is. It could help you see if you met your goals for the year and help you set new ones for the year ahead. This might also be a great time to get everything in order, so EOFY isn’t so stressful next March!
Here are some top EOFY tips for carpenters:
Chase outstanding invoices
Following up on unpaid invoices is the last thing most carpenters want to do. However, it will make your EOFY much simpler. Not only will it put money you’re owed into your accounts, but chasing outstanding invoices makes it easier to balance your books.
Reconciling your accounts as accurately as possible may make it simpler to file business taxes. It also saves you the confusion that often comes with carrying these invoices over into the next financial year. It may be time-consuming and frustrating, but it is probably worth it to chase your outstanding invoices now!
Top tip going forward: Set aside time each month to chase late invoices, so you’re not always rushing to get them sorted in March.
Organise your paperwork
Reconciling your accounts and filing business taxes is easier if you’re organised. Prepping your paperwork before you start may save you time, confusion, and frustration. Otherwise, you may spend precious time chasing down necessary receipts and documents.
There are many types of paperwork that you may need to close out your financial year. Think expense receipts, bank and loan statements, credit card statements, payments and receipts from other contractors, and receipts for tool or equipment repairs or purchases.
Top tip going forward: Save and file financial paperwork as it is received so everything is organised and ready next EOFY.
Do a stocktake
If you keep stock and materials, now is a great time to inventory your stock. A stocktake helps you know what supplies you have on hand and how much. Accurate inventory lists can help you avoid buying unneeded items for future projects. Running a regular stocktake also gives you a chance to assess the quality of your stock, so you can write off or replace damaged materials.
Top tip going forward: Carefully record inventory changes as they happen and consider doing smaller, more frequent stocktakes throughout the year (such as at the end of the month or quarterly).
Check your KiwiSaver
It may make sense to max out your KiwiSaver Government Contribution every year (if you are eligible). You must deposit $1,042.86 into your account every year by 30th June to receive the maximum matching contribution from the government ($521.43).
Since you’re already looking at your finances, it probably makes sense to check that you are doing this now. You may decide to increase your weekly contribution to hit the right amount by the deadline. Remember: It can take a few days for a deposit to hit your KiwiSaver, so you may need to transfer funds well before 30 June.
Top tip going forward: Add KiwiSaver contributions to your monthly budget. Depositing a smaller amount more frequently may impact your finances less than waiting to make a single large deposit.
Review your finances
This tip is about more than just taking care of your tax filing! EOFY is a great time to look towards the next financial year—and beyond. Reviewing your finances can give you a better idea of how well your business is doing and how you might improve it.
Once you’ve run your reports and filed your taxes, you should have a clear picture of where your carpentry business sits. What went well, and what didn’t? This might be the time to rethink business goals, set new ones, or try something new. You may consider ways to cut expenses, new advertising methods, or decide to invest in new or better tools.
Top tip going forward: Consider revising your business plan to reflect how your business has changed and your new short- and long-term goals.
Think about your insurance
A lot can change in a year! Now might be the perfect time to think about your business insurance and decide if the policies you currently have still fit your business needs. Different amounts and types of insurance might be necessary to fully protect your small business.
As your business grows and changes, your carpenter insurance coverage may need to change too. For example, it may make sense to increase coverage amounts to match increased revenue, leasing a larger workspace, and other big changes. You may also want to consider other types of insurance, such as Professional Indemnity or Business Interruption, to meet new challenges to your business.
Top tip: It’s fast and simple to compare insurance for carpenters with BizCover. Compare quotes from leading NZ insurers and see if you could be saving on your carpenter insurance—Start now!
This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
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