Regardless of the size of your business, the end of the financial year (EOFY) is an important time for business owners. It’s crucial that you prepare properly to ensure that you are ready when the EOFY deadline arrives. Gathering all the information you need in ahead of time will ensure that you meet your obligations to the ATO and have everything in order so that the process goes as smoothly as possible.
However, in order to prepare everything that you need for the end of the financial year, you need to first understand what your obligations are. As a small business owner, there are particular requirements you must meet and certain reports that you have to submit to the ATO. Understanding what is required of you will allow you to put the correct processes in place to gather the required data throughout the financial year. With this approach, when the end of the financial year is looming, you can be confident that the process of providing this information to the ATO will be seamless.
Let’s take a closer look at some key areas you need to be aware of when you’re preparing for the end of the financial year.
Payroll
Every year, businesses must account for salaries paid to employees, taxes paid, and superannuation. In the last year, all businesses in Australia have also had to take steps to ensure that their existing payroll systems are compliant with single touch payroll (STP). All of this information must be reported to the Australian Taxation Office (ATO) and be submitted as part of your end of the financial year obligations.
Taxes
In Australia, the financial year for the purpose of taxes runs from the 1st of July to the 30th of June. At the end of the financial year, businesses are required to submit an income tax return for this time period. Filing financial information related to your earnings and deductions not only satisfies your obligations to the ATO but it can also provide you with some insight into the financial health of your company. This is a great opportunity to take inventory of your business’s progress and to start preparing for the upcoming financial year.
Assets And Inventory
Many businesses will hold assets such as buildings, cars and trucks, fixtures and fittings, computers, office equipment, different machinery and the stock that you hold, as well as a host of other things. At the end of the financial year, you can claim deductions for a range of expenses associated with maintaining, repairing, buying and even selling these assets. However, to do so, it is crucial that you keep records of all of these payments to ensure that you can claim any deductions that can be applied.
Stay Organised
To avoid a last-minute scramble as EOFY approaches, it’s best to keep your records organised throughout the year. Keeping detailed records throughout the year means that you will have all of the information you need when June 30th rolls around. With all of your information in order, you don’t need to waste time and interrupt your normal day-to-day business tasks in an effort to get everything ready last-minute. Make sure that you are well-prepared and the end of the financial year will be less stressful and much easier on you and your team.
Get Ready For EOFY
With June 30th looming, many business owners will be frantically doing everything that they can to get their records in order before the end of the financial year deadline. In order to avoid a stressful situation, be sure to stay on top of your record keeping throughout the year. Having your records in order throughout the year will make the process of submitting your records to the ATO more straightforward and streamlined. After a busy year, it can be very difficult to find documents from earlier in the financial year and sometimes it can almost be impossible to track down what you need. Not only could not having these documents ready result in penalties from the ATO but you might also miss out on the opportunity to receive any tax deductions you might otherwise be entitled to.
The end of the financial year should not be viewed as a time of stress and worry. Instead, businesses should look at EOFY as a time that they can use to take stock of how the business is performing. Being organised and prepared for EOFY is key to ensuring that your business can look forward and plan ahead so that the next financial year is even better than the year gone by.
