The end of the financial year is just two months away, and now’s the time to start preparing.
Not sure where to start? We’ve brought on four superstar accounting professionals to help us put together a comprehensive EOFY to-do list. That means actions you can take now to set yourself up for success next financial year.
Save yourself the stress and anxiety, get your ducks in a row now, and come into July 1 feeling fresh, organised, and prepared.
1. Find an accountant you love
If you don’t have a tax professional that you trust with your life (or your business), now is the time to find one.
- Understand what you need your accountant to be able to do. For instance, if you need someone to help you with tax-related tasks, make sure you seek out a registered tax or BAS agent. If you’d like someone to help you out with accounting software, make sure you seek out someone who is across technology. Always use the Tax Practitioners Board Register to find a registered tax agent.
- Book check-ins with your accountant throughout the year, not just when BAS is due or at tax time.
“These check-ins aren’t just about ticking compliance boxes – they’re about strategy, clarity, and making sure your business is actually working for you.”
Catarina Santini, business advisor, accountant, and tax agent
2. Educate yourself
Whether you’re a brand-new entrepreneur or a seasoned business owner, you should be across your own finances.
- Browse the ATO’s Tax Time toolkit for small business, which they describe as a “one-stop shop” for tax-related help.
- If you’re after more structured learning, check out the ATO’s “essentials to strengthen your small business” platform; this offers short courses on topics like record keeping, cash flow and deductions.
- Each quarter, the ATO changes shares its small-business focus areas to help small-businesses and their tax professionals understand how they can get and stay on top of their tax, super and registry obligations. You can check this on the ATO’s website: “Small business focus areas”.
- Look up whether any legislative changes are coming up that might affect you. If you have employees, for instance, check for any upcoming changes to awards on the Fair Work Ombudsman’s “Major award changes” page, for instance.
3. Review your needs and obligations
Maybe your turnover has increased, you’ve employed new staff, or the nature of your business has changed? There are many cases in which your business’s needs and obligations might have changed. Review how things have changed for you in the past financial year and what that might mean.
- Review insurances: Do you need extra cover due to changes in business activities or income? Or are there insurances you no longer need?
- Review payroll tax obligations in your state, if you have employees.
- Check if you need to register for GST for the first time, or if you will need to soon.
4. Get organised
If you’re not keeping track of sales, money might be going down the drain. Keeping receipts is essential; if you’re ever audited by the ATO, bank statements won’t cut it.
- Use the ATO’s record-keeping evaluation tool to help you evaluate your current system, if you’re unsure about it.
- Consider using the ATO app if you’re a sole trader.
- Assess whether you (really) have a system that allows you to log invoices, receipts and expenses both regularly and accurately. If not, it’s probably time to get your accounting software in order (see below).
5. Set up new software
If you need new software, make sure you leave plenty of time to get it working (and integrated into your processes) before the new financial year starts, to set you up for success.
- Assess your existing accounting software – is it working for you? Can you create efficiencies? If you want to change software or start using it for the first time, leave plenty of time to research and implement.
- Book a training session with your accountant (well in advance of June 30) to help you set up new software, if you feel you need to do so.
6. Create some quick cashflow wins
- Review pricing – compare your rates with industry standards and factor in rising costs.
- Set up an automated transfer to send some money to a dedicated tax/GST savings account.
- Use the ATO’s Cash Flow Coaching Kit, which has tips to help you meet tax and super obligations without them getting caught up with your business cashflow.
- If you’re struggling to get paid on time, consider automating invoices and setting up direct debits from clients.
- Check your bank accounts for long-forgotten free trials etc – services you don’t use or seldom use. There are software services that can help you do this, for a small fee.
7. Calendarise your year
Make it easier for yourself to keep up with key dates by putting them in your calendar now.
- Ask your accountant for key tax dates – or find them on the ATO website – and put them into your calendar.
- Mark down upcoming legislative changes that are relevant to you. The ATO also has on its website a page dedicated to tracking upcoming legislation and a small-business newsroom. You may also want to ask your accountant about this if you’re unsure what will affect you.
- Map out income and expenses ahead of time, as best you can.
8. Identify (and prepare for) deductions
Make sure you’re not missing out on any deductions. Your accountant should be able to help you work out what you can deduct.
- Identify potential tax deductions: home office expenses, vehicle costs, professional development, underused assets and excess stock, bad debts, and so on.
- Identify pre-paid business expenses – like insurance premiums or telco services – and ask your accountant whether you can get an immediate tax deduction on them.
- Ensure that all June-quarter superannuation contributions are paid by June 30, to accelerate the tax deduction.
- Consider voluntary super contributions before year-end to maximise tax benefits and boost retirement savings.
- If your business is looking to pay bonuses, put in place a properly executed bonus plan by June 30 to claim the deduction this year.
- Consider how your trading stock is valued. Trading stock can be valued using different methods for taxation purposes – at cost, market value or replacement value. Changing the valuation method at year-end for tax purposes can either bring forward or defer an amount of taxable income so it pays to look closely at the method adopted.
“Provided they are used for business purposes, for instance in work recreation areas or office receptions, it is even possible to claim items like TV’s, gym equipment, works of art and computer gaming terminals. If you’re claiming more left-field deductions like these, make sure you keep proper records.”
Mark Chapman, Director of Tax Communications, H&R Block
Thanks to the following tax and accounting experts who contributed to this checklist.
