5 tips to help you prepare for end of financial year
4-minute read
The end of the financial year (EOFY) might be looming, but with some planning and preparation, it doesn't have to be too taxing. This short checklist is designed to help your small business get ready for the upcoming tax season and the new financial year ahead, including meeting your legal and tax obligations.
What we'll cover
Key take-outs
- Keeping your records up to date will speed things up at tax time
- Online banking tools can help save time and simplify accounting
- Find out what’s tax deductible and how to claim deductions
- Ensure you have met your superannuation obligations
- Diarise all the key dates for both BAS and EOFY reporting to act as reminders.
Your mini EOFY checklist
It's important to be on top of your EOFY reporting, and aware of your tax liability on business income. Theses tip may help you start off in the right direction – but if in doubt, it's a good idea to employ the services of a tax professional.
1. Get your paperwork up to date
Having important paperwork in place helps streamline the EOFY process. Some examples of records you need to have to hand are:
- Financial records including your income statements and profit and loss statement
- Receipts for business related purchases including any purchase of assets
- Receipts for motor vehicle expenses and travel expenses that directly relate to your business
- Records of tax returns, business activity statements (BAS), GST returns and employee superannuation contributions.
2. Simplify accounting with online tools
Tax time can be simpler if you separate your personal banking from your business banking. This helps you capture all your business expenses in one place, while avoiding the risk of accidentally claiming for a purchase that's not connected with your business.
A separate business bank account also helps you track business performance and manage your business cash flow. With Westpac for example, you can choose between a $0 monthly fee business account (Business One) and an added value business account (Business One Plus) that gives you access to exclusive discounts on popular business products and services.
These accounts come with tools that can assist with everyday bookkeeping and gathering information for BAS and EOFY. For example, Westpac Online Banking offers:
- Third-party access to selected bank accounts including a ‘view only' option, to let you share cash flow and other financial information with your bookkeeper or accountant
- Bank feeds1 that can connect your business bank accounts to accounting software such as MYOB and Xero.
3. Manage your deductions
Ensuring you make the most of deductions makes good financial sense, so it's important to find out what you can claim and maintain supporting documentation.
As a business owner, you may claim tax deductions for most business expenses. For example, claim the interest on your business loans and other business related expenses such as business insurance policies and tax agent costs. Remember that you must keep records to prove the expenses if you’re asked to.
4. Meet your superannuation requirements
Businesses with superannuation guarantee (SG) obligations are required to pay employee contributions. Meeting your obligations by 30 June in a given year may allow you to claim a tax deduction in your income tax return for that year, where the contributions are made to a complying superannuation fund, or a retirement savings account for the purpose of providing superannuation benefits for your employees.
5. Be aware of due dates
Put all the key lodgement and payment dates in your calendar and set reminders to help avoid Australian Taxation Office (ATO) penalties for being late.
To help you, the ATO website lists all the due dates by topic.
To sum up
A little preparation and planning before tax season could save you time preparing for end of financial year. It's also important to remember that some actions must be considered and taken before 30 June each year – so don’t leave things until it’s too late.
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Things you should know
This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering tax and finance options for your business. Westpac does not endorse any of the external providers referred to in this article.
The taxation position and information in this article is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and their interpretation. Customers must seek their own independent tax advice in relation to their individual circumstances.
Westpac's products are subject to terms, conditions, and fees; and eligibility criteria may apply. Before making a decision, read the disclosure documents for your selected product or service, including their T&Cs, and consider if the product is right for you.
- Read the Westpac Online Banking Terms and Conditions (PDF 407KB) before making a decision. Not all accounts† are eligible to be included in a bank feed. Not all third-party service providers support bank feeds for all accounts.
Bank feeds must be set up with third-party service provider before it can be connected in Westpac Online Banking. If your third-party service provider doesn’t appear in the drop-down menu in Westpac Online Banking, you may need to check that your third-party service provider is registered with Westpac. Should there be any changes to your user access or network access levels, you may need to disconnect your bank feed(s) as any access changes won’t impact bank feeds. The products and services offered by third-party service providers are subject to their own terms and conditions and fees and charges. Westpac doesn’t guarantee or endorse the services or products offered by third-party service providers
† Currently Business Credit Cards and Business Term Deposits accounts aren’t available for third-party service provider’s except MYOB. This may be extended to other third-party service providers in the future.