Hot tips – Optimising your end of financial year (and beyond)
We’re now half way through April, which means we are on the happy home stretch towards end of financial year (and tax time!). To help small business owners to optimise this quarter (and beyond), we’ve prepared some quick hot tips to get your business on the front foot for 30 June.
1. Get your books in order. Spend some time catching up on the business’ bookkeeping. This can help to reduce accountant fees at tax time and also provide a great starting point for the next hot tip.
2. The final quarter of the financial year is also the ideal time to analyse the past 12 months and use this insight to plan for the future. Developing realistic budgets for revenue and expenses, tax planning for the year(s) ahead, reviewing insurances, setting business goals for the next three to five years, assessing risk management and even considering succession planning are all effective ways to help maximise opportunity.
3. Reconcile your accounts receivable. Follow up on any amounts that remain outstanding and boost your cash flow immediately.
4. If there are any unrecovered debts, consider writing these off as a bad debt. This is an allowable income tax deduction.
5. If your business manages inventory, consider a full stocktake closer to 30 June and revalue the inventory figure accordingly.
6. An effective strategy for small business owners trying to minimise their tax bill is to prepay services and defer income in order to reduce taxable income for the year.
7. The instant asset write off scheme was increased to $30,000 on the 2nd of April (2019). If your small business genuinely requires new equipment or assets, this can be an effective way help reduce your income tax bill.
8. For superannuation, it’s a good idea to make sure you are on top of all superannuation obligations. Employee superannuation contributions is an allowable deduction. If there are any amounts payable still outstanding, take care of these before 30 June (even earlier to allow for super fund processing times).
If you’d like help to specifically optimise your own end of financial year, get in touch for a chat today.
All registered tax agent services are provided by Mode Bookkeeping Pty Ltd (registered agent number 25221498), who have more than 20 years experience in tax advisory services to businesses of all sizes.