End of financial year is often one of the busiest times of the year for small business owners. It’s a time of juggling the books, as well as chatting to accountants and tax agents helping manage your business’ finances. It’s also a time to reflect, review and focus on the year ahead, taking time to visualise where you want your tradie business to be.
To help you get through this frantic time of year we’ve listed some handy ways you can save time and money at EOFY and explore how a little planning can help your business in the long-haul.
When you’re running your own tradie business, you’re already experienced with being on top of your books, understanding business laws and ensuring everything is compliant. Being organised and knowing what is required at tax time means you can prepare all year round by having a system in place. Some of the things that you can do to help prepare include:
- Create a summary of your income expenses with a profit and loss statement
- Make a list of your debtors and creditors
- Display a list of your records of your asset purchases to assist when calculating the depreciation of your expense claims for capital gains tax
- Complete a Business Activity Statement (BAS)- this is where your accountant or tax agent can really help
- Throughout the year start saving your electronic records (bills, statements, receipts) in a cloud, this will help save with time.
To be able to lodge your tax return, you will need to ensure that all your staff (including yourself) receive a PAYG (withholding payment summary) annual report. This will involve reconciling your payroll and providing these payment summaries to your employees by the required due date in July.
Before you proceed to provide the PAYG summaries you will need to reconcile your business accounts first. EOFY is the ideal time to review your business’ financial position and to notice what changes have taken place over the past 12months.
If areas in your business like revenue, the number of staff you have employed and your business assets have increased, it is a good idea to get in touch with your business insurer to update these changes. Spending a bit of time now could help save you in the long run if your business had to make a claim, potentially being out of pocket due to being underinsured.
Recordkeeping covers many aspects of your business and one of these is your stock levels. If the nature of your business involves buying and selling stock like tools and supplies, you will then need to conduct a stock take. A stock take allows you to assess the value of your stock and plays a key role in determining your business’ profit or losses for the year.
Help take some of the headache of the stock take process by planning ahead and not leaving it to the last minute. If this is something which is going to impact your suppliers and customers let them know well in advance.
It’s also a time to check how much you are paying to your suppliers and to see if you can wrangle a better deal. This could help save your business some extra hard-earned dollars, increasing your profits for the following EOFY.
Understand what you can and cannot claim
There can often be some confusion around what you can claim as tax deductions. The last thing you want is for your business to miss out on potential deductions, so it is important to have a clear understanding of the process. Keep an eye on the Australian Taxation Office website which provides updates to any changes on claimable items/deductions.
As a general rule, most of the costs acquired while running your business can be claimed as a tax deduction if they relate directly to earning your income. This is where the skills and expertise of your accountant or tax agent can help to guide you and assist with maximising your tax return, protecting your back pocket.
Review your process
After all the reporting and collection of your business’ financial information, set some time aside to review your business and its activities over the year. Take note of key areas of growth, what didn’t do so well and start making plans on how you can assist your business moving forward.
This is where the talents of financial experts like your accountant can help to create a plan of attack, instigating new strategies and processes, an investment that is going to help benefit your business.
EOFY is also a time to review other aspects of your business, not just your finances. Areas like marketing for example are interconnected with how your business operates. With the new found insights of your business’ financial position it is a chance to assess plans that you currently have in place that may no longer suit the needs of your business.
Set some goals and plans for the year ahead, keeping in mind what you have learnt from the past financial year and don’t be afraid to seek advice to help make it happen. Things like your Public Liability insurance* can be sorted out online in minutes with Public Liability Australia. Receive a quote and get covered in minutes with our hassle-free online insurance experience today.
*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice
Public Liability Insurance is a business name of BizCover Pty Ltd (ABN 68 127 707 975; AFSL 501769)