In this article, Trish Anderson from Anderson Tax Solutions shares her ‘Sorted. Top 3 Must Haves’ for small business owners in Australia to prepare for the end of a financial year.
The end of financial year is a great time for small business owners to take stock.
If you are organised enough to have all your information in an accounting software program (not just a shoebox) you are already a step ahead. Make sure that you have coded up and entered all your transactions. Then it’s time to run some reports – start with a profit and loss for the year. Exciting stuff….it can tell you a lot of things – good and bad. How does this year stack up to last year. Is there a big change in particular cost centres? Do you remember why?
The bottom line – how does it look? If you have covered all your expenses and remembering that you may still have deductions for depreciation on existing plant & equipment or interest, you may consider paying expenses before 30 June – eg staff super which wouldn’t be due until later in July or paying next month’s rent or other bills in advance.
Another option for small business is the Instant Asset Write Off. You can purchase plant and equipment used for running your business up to $30,000 before 30 June and claim in the 2019 year. There have been some changes through the year as to amounts and dates so check with your accountant what applies to your asset purchases through the year.
The new financial year brings some changes for small business that employs staff. You may have heard about Single Touch Payroll (STP). From 1 July small business needs to regularly report payroll event so make sure your software is ready to do that. Another change for certain industries is the widening of the Annual Taxable Payments Reports. Whilst this was originally just for the construction industry, other industries are now included such as cleaning, courier, road freight and IT. Make sure your software is ready for this one too.
So… my Sorted. Top 3 are…
- Get all your ducks in a row. Review your situation and find out your business’s health
- Pay all expenses you can and invest in new equipment but only if you can afford to do so and if it is something you really need.
- Make sure you have the right software systems in place so that you are compliant with all the ATO wants from you in the year to come.
The above information is general in nature and is not intended to be considered as advice. You should contact your own accountant or adviser to obtain advice which is applicable to your personal situation.
Trish Anderson, Certified Practising Accountant