5 Things Businesses Need To Be Doing Ahead Of The EOFY
As the end of financial year (EOFY) approaches, it’s important that Australian businesses prepare for their tax responsibilities and reassess their financial strategies. There are a range of things businesses can do to help with their tax obligations and even start planning ahead for next year. Here are five tips your business should consider before June 30.
Review your financial statements
A thorough review of your annual financial statements is the first step towards a successful EOFY. This will help you spot potential issues, make necessary adjustments and prepare for accurate lodgement. In combination with reviewing your financial records, make sure all your accounts are reconciled. Having your accounts in order simplifies the tax filing process, helping to identify discrepancies, and ensure accurate reporting.
EOFY is the ideal time to review and claim all eligible business deductions. Familiarise yourself with the wide range of deductible expenses, such as office supplies, travel costs, equipment and staff training expenses. Understanding the scope of deductible items can help maximise your returns, so be proactive in keeping a record of these expenses throughout the year.
Bring forward asset purchases
For businesses planning to purchase new assets, it may be advantageous to do so before June 30. Under the Australian Government’s temporary full expensing measure, you may be able to deduct the full cost of eligible depreciating assets in the current financial year. This could significantly reduce your taxable income, making strategic asset purchases a smart move. If you think your business could benefit from a new asset like a piece of equipment, it might be worth speaking with your accountant and finance broker.
Understand changes to tax laws
Staying informed about the changes in tax laws is vital for compliance and effective tax planning. Make sure to review any recent amendments to tax regulations and assess how they might impact your business. From changes in depreciation rules to tax rates and superannuation laws, understanding these updates can help you avoid potential pitfalls and make the most of new opportunities. While your accountant should always be your first point of contact, it’s a good idea to have a basic understanding of the laws that may impact your business.
Plan for the next financial year
EOFY is not just about wrapping up the past year, it’s also an opportunity to put new strategies in place that will help your business in the future. Use this time to set financial goals for the upcoming year and formulate a budget to achieve them. This might involve planning major expenditures, setting revenue targets or identifying areas for cost savings.