Preparing yourself for the End of Financial Year

Posted on: Thursday, 24 May 2018.

With the end of the financial year almost here, it’s easy to be overwhelmed. But with proper planning and enough knowledge, this can be a positive period for your business. It’s an opportunity to reflect on all aspects of your business, and potentially change things for the better.

We have collated some information that could come in handy as we approach the end of the financial year.

Deductions

The end of the financial year means you may be able to claim deductions on your business. But it’s important to understand what does and doesn’t count as a valid deduction. Things you may want to consider as tax deductions include:

  • your website
  • motor vehicle expenses (including diesel fuel)
  • whether you are operating at home
  • travel expenses
  • use of machinery, tools or computers.

Some expenses may require you to calculate depreciation or take into account capital gains tax. Your business deductions may also be affected by the fundamental structure of your business.

Another consideration for small businesses that turn over less than $10 million is the instant asset write off, where small business can write off assets costing less than $20,000. This now applies until 30 June 2018. Read more here or consult with your accountant.

Reviewing your business

The end of the financial year can provide some great opportunities. As you gather all the relevant information to ensure that you’re meeting all your obligations as a business owner, it’s the perfect time to take a close look at how you’ve done over the past year, and plan for the next one.

Have a strategy session

Have you achieved your objectives? Are you meeting your targets? If you’re not, why? And what can you do next in the next financial year to ensure you do better?

Taking a day (or a half day if you’re too busy) to plan for the next financial year is important to make sure the business continues to evolve and innovate. There may be new marketing opportunities to reach a new audience and drive more enquiries.

Insurance

An important part of this review process is looking closely at your business insurance. If you’ve changed your business over the past year, you may be paying too much, or you may be underinsured. Additionally, changes in legislation may require you to update your insurance.

End of financial year is the perfect time to check that all your assets are insured correctly, consider if there are new risks to your business, consider whether your inventory is accurately valued, and consider whether your business insurance is providing the right cover.

It’s also a great time to ensure your business is structured correctly, and your plans for finance, marketing, and operations are the best they can be.

What about next year?

The best way to make the end of the financial year easy is to stay on top of things throughout the year, including making sure your bank, debtors and creditors reconcile, and your GST reports are ready.

It’s also highly recommended that all your files relating to these tasks are properly backed up and stored somewhere safe.

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