At the end of the financial year on June 30, business owners need to file their taxes, review the past 12 months, and prepare for the next year. Most people dread the end of the financial year because they focus on the tax aspect, but it’s a great time to analyse your business’s performance over the past year and spot areas that could use improvement. If you prepare for the next year, you’ll be able to grow your income. Here are several end of the financial year tips for small business owners and start-ups:
Figure out which tasks you are required by law to complete for your small business. Examples of tasks you might have to complete for the end of the financial year include create a business activity statement (BAS), submit a PAYG withholding payment summary annual report, calculate workers’ compensation insurance, and review staff salaries and awards conditions.
Double check that your finances are reconciled and accurate. You don’t want your tax return to be rejected for inaccuracies. It’s less stressful to check that your financial information is accurate before filing taxes.
Look for potential cash flow problems and brainstorm strategies to handle those possible problems in case they occur. You can review your balance sheet to detect potential problems with cash flow.
Analyse your investments to see if selling any of them could minimize losses during tax time. You can write down or write off the value of a stock if it would have a positive impact on your taxes.
Consider pre-paying for services and supplies because it can count as a tax deduction for your business. It’s a common strategy business owners use to reduce how much tax they owe.
Write profit and loss forecasts for the next 12 months. What better time to set your financial forecasts than the end of the fiscal year? You will have the data you need to make accurate forecasts. Remember to be realistic in your forecasts. Small business owners sometimes overestimate how much they’ll earn and underestimate expenses.
Tax time is an important period for analysing your business’s performance over the past year. If your business isn’t making a profit, you’re obviously in trouble and need to turn it around to not only stay in business but to thrive. If you follow the end of the financial year tips listed above, you’ll have better control over your finances, which will give you greater peace of mind.