The end of the financial year (EOFY) is a crucial time for Australian small businesses. It provides an opportunity to review financial performance, make necessary adjustments, and plan for the future. As this season approaches, small business owners should consider taking advantage of technology tax deductions and optimising their financial processes. To help Australian small businesses make the most of the EOFY season, here are three essential tips.
Embrace Technology and Maximise Tax Deductions
Technology plays a vital role in enhancing business operations and financial management. Embracing technologies like AI may feel intimidating, but with the right technology partner, small businesses can take a considered and tailored approach to technology adoption.
- Upgrade Business Equipment: Take advantage of the instant asset write-off scheme to deduct the cost of eligible assets. Invest in technology such as computers, software, or machinery to streamline operations, enhance productivity, improve customer experience, and reduce costs. For example, a construction company could potentially save up to AUD 34,100 per year if just one of its workers used technology to conduct two site visits virtually per day, instead of travelling one-hour to do it in person, Nearmap estimates.
- Embrace Cloud-Based Accounting: Transition to cloud-based accounting software like QuickBooks. It simplifies record-keeping, streamlines invoicing and expense management, and offers real-time insights into your financial health.
- Automate Processes: Automation not only boosts efficiency but also provides accurate data for financial analysis, resource management and decision-making. Explore options like receipt scanning apps, payroll software, and expense management tools to simplify your financial workflow — or use automated customer, project, and environmental insights to identify cost-saving and business-building opportunities and remove the risk of costly human error.
Review and Reconcile Financial Records
Reviewing and reconciling financial records is essential for accuracy and compliance. Consider the following steps:
- Conduct a Financial Audit: Review income and expenses, ensuring proper categorisation and recording. Identify any discrepancies or missing information.
- Reconcile Bank Statements: Compare bank statements with accounting records to ensure accuracy. Identify outstanding payments, uncategorised expenses, or errors.
- Update Inventory: Conduct a comprehensive stocktake to assess inventory value accurately. Identify slow-moving items, potential write-offs, and ensure accurate financial statements.
Seek Professional Guidance
Navigating the complexities of EOFY can be overwhelming for small business owners. Seeking professional guidance from an accountant, bookkeeper, or technology provider can provide valuable insights and ensure compliance with tax regulations.
- Engage with an Accountant: Collaborate with a qualified accountant specialising in small business taxation. Maximise deductions, identify cost-saving opportunities and ensure accurate reporting.
- Schedule a Business Review Meeting: Discuss financial performance, tax planning, and strategies for the coming year. Gain a deeper understanding of your business’s financial health and identify areas for improvement.
- Stay Informed: Keep up to date with regulatory changes and new initiatives that impact tax regulations and incentives.
- Find the right technology partner for you: Technology adoption is not just for big corporations. The right provider will offer solutions designed specifically to meet the needs of small businesses — your perfect technology partner is out there!
The end of the financial year is an ideal time for Australian small businesses to optimise their financial processes. By embracing technologies, leveraging government incentives, reviewing financial records, and seeking professional guidance, businesses can maximise their benefits and set themselves up for success in the new financial year.
Please note: the advice provided is general in nature, and it is recommended that small businesses seek professional advice based on their individual circumstances.
Written by Gafar Fadl, General Manager SMB, Nearmap, and Tish Bhagwandeen, Intuit QuickBooks Trainer Writer Network, Chartered Accountant