End of financial year can be a taxing time for businesses. All puns aside, this is a demanding period for businesses and June 30 is fast approaching. How prepared is your SMB for the tax period?
There are many obligations to be met before June 30 while this time of the year is also the ideal time to assess the financial health of your business to help prepare you for the next 12 months.
Here are your obligations and some advice on actions you can take to put your business in a strong position.
The basics: preparing your EOFY paperwork
Every year, there is the standard checklist of obligations every business must tick off. Here is your list so you can start preparing now, if you haven’t already.
- A summary of income and expenses: This is presented in the form of a profit and loss statement. It can be done monthly, quarterly or annually and can also help you develop sales targets and assess your profits and markups.
- Stocktakes and assets: Stocktakes are essential for most businesses, with the criteria set for business turnovers of $10 million or more, or if the difference between your stock level at the beginning of the year and the end is more than $5000 (if your turnover is less than $10 million). You will need a record of assets as well, as you can claim on depreciating assets.
- Record of debtors and creditors: This is mandatory as part of your EOFY obligations.
- EOFY reports: You will need to lodge yearly reports or returns for PAYG withholding, fringe benefits tax (FBT), Goods and Services Tax (GST), and the taxable payments reporting system.
- Superannuation requirements: This can be quite complicated and often changes from one year to the next. It is advised to speak to a finance professional about your obligations.
Your tax return - knowing the deductions you can claim
There is a range of things you can claim as deductions for your small business, like website expenses, cars, bikes, machinery etc and even operational costs for working from home (a more common practice in 2019).
As we live in the digital age, thankfully there is an official ATO app with a tool called mydeductions which can assist you with this process.
Know your tax obligations in legislation starting next financial year
Single Touch Payroll (STP) is the biggest change coming and it will be in effect from July 1. It aims to streamline and simplify reporting by using software to report employees' tax and super information to the ATO every time you run your payroll and pay your staff.
Larger companies have already started STP reporting and now smaller employers with 20 or more staff will be required to do the same.
The very popular instant asset write-off has been increased to $30,000 and extended to June 30, 2020.
If you purchased anything under that amount purely for business purposes in the last 12 months, chances are you can claim it under the scheme.
A four-year extension of the GST compliance program and an extension of the Serious Financial Crime Taskforce have also been proposed to commence from July 1, 2019.
Review your finances and business structure
With all of this reporting, stocktaking and assessing your finances, this is the perfect time to review your business health and plan for the future.
By working with a finance professional, you can meet all of your obligations and put steps in place to grow your business for the future.
Is your data safe? Are you compliant with new data security legislation?
Finally, when you are saving all of your sensitive data make sure you are doing so with the latest anti-virus software installed, encryption and protection against cyber-attacks.
Mandatory data breach notifications are now legislated in Australia which means anytime your business's data or the data of your customers is breached, you have to report it. This can be very damaging to your business's reputation, but not as damaging as the impacts of cybercrime itself.
Contact Morris Finance on (03) 5223 3453 today for all of your Business Finance assistance.