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5 ideas for your end of financial year plan

Smarter Writer
Smarter Team

A team of business and technology journalists and editors that write to help Australia’s community of small and medium businesses access the technology and know-how that helps solve problems and create opportunities.

Smarter Writer
Smarter Team

A team of business and technology journalists and editors that write to help Australia’s community of small and medium businesses access the technology and know-how that helps solve problems and create opportunities.

It’s EOFY time, so that means making sure your books are in order. It’s also a good reminder to step back from the day-to-day and assess other aspects of your business, too. Review your performance over the past 12 months and set strategies in place to ensure you’re where you want to be in another year’s time.

The end of the financial year wraps up June 30. That means from July 1st, it’s tax season. For sole traders and partnerships using myTax, you’ll need to lodge by October 31st, or if you’re lodging through a registered tax agent, they can advise on the date. Small companies generally need to lodge by February 28th, though – again – if you’re going through a tax agent they will let you know when to lodge. 

Whenever your deadline is, there’s a lot to get through, and there’s more to it than tax. Make sure you put these five tasks on your EOFY to-do list.    

Make sure ‘the books’ are done

These days, ‘the books’ are more likely to be kept through business accounting software or cloud accounting, but the principles of record-keeping and compliance are the same no matter what platform your numbers are on.

The two most important documents to prepare are your profit and loss (P&L) statement and your balance sheet. You’ll need a really accurate record of transactions to prepare your P&L statement – or have your tax agent prepare it for you. You can help by using only business bank accounts to pay business bills and staying on top of bank reconciliation. Check the features of your accounting software, too – you may be able to retrieve data straight from your bank to speed things up.

Your balance sheet will give you a good indication of the financial health of your business. The best approach is to update throughout the year, rather than rush things as EOFY comes around. If you’re not doing this already, set yourself up for next time by recording new assets and bills as soon as they come in, and use invoicing software to review assets and liabilities at a glance. This can also help you manage your deductions.

Businesses with employees will also need to produce payment summaries, ensure superannuation commitments are being met and work out fringe benefits tax. If you’re unsure of what’s needed, check with the ATO.

Review where you’re at and plan for next year

Now is the time to sit down with your accountant and review your financial situation. Did you meet all the targets you had in place for the financial year just gone? What can you do differently for the next 12 months to propel your business forward? Create a cashflow forecast to manage any potential shortfalls ahead of time, and ensure you can still handle payroll and other outgoings.

You can also ask your accountant to create a tax plan for the year ahead – they will be in a better position to lower your tax bill if they can get a 12-month head start. Tax laws and deductions can change over time, so make sure you are up-to-date with the latest information. That way you’re clear on your responsibilities and you’ll be aware of any new opportunities going forward. 

Is your business model still a good fit?    

Take a look at your business plan pitched against your accounting data. Are your goals still the same? Are your strategies working, or do they need to be revised? Knuckle down and create a comprehensive business plan, then commit to an ongoing review process. Make sure you clearly identify your mission statement, product plan, financial plan and marketing plan.

While you’re at it, check to ensure the systems currently in place work to support your changing needs and goals. If you haven’t already, look into automation to establish efficiencies and free up your time for more important stuff: like developing a clear vision for your business and working towards those goals. You’ll have a running report of your business performance, and create an automatic audit trail, too.

At certain stages of growth and expansion your business structure may have to change entirely just to keep up. Maybe you’re taking on a new partner, moving into new product lines or picking up clients overseas. If you’re planning any big changes in the year ahead, it might be time to review which business structure you want to take into the future. Compliance and tax regulations will differ, too. 

Enhance your data protection strategy

Cyber security is a must-have in today’s economy – whether your business is small, medium or large, data protection is essential to gain and maintain trust.

Take the opportunity to review your policies and ensure everyone in your business (including you) understands safe online practices. Make sure you’ve covered the basics: is the security software on all your devices updated? Is your databacked up regularly, in a secure manner? Are devices and accounts protected with complex passwords and other authentication?

Understand your risks and think about how to safeguard against them across all points of internet connectivity. Do you have a lot of employees working remotely? You might want to invest in a VPN. Do you operate a retail shopfront? Make sure your POS system is behind a firewall.

Getting expert advice is essential. And you may also want to consider hiring a cyber security specialist to get things shored up.

Do some financial housekeeping

Out with the old and in with the new. That’s the attitude at the end of the calendar year, and it should be the case for EOFY, too. First, look at any unwanted assets and consider whether they’re worth keeping around. Sales of unused assets can generate cash and reduce storage costs. Or you might want to look at hiring out items and equipment instead.

While you’re getting rid of old stuff, consider switching banks, insurance companies or suppliers to get a better deal – and make sure to read the relevant product disclosure statements so you’re getting exactly what you need. You can also shop around for cheaper energy providers and other utilities. Covering off these basics will help you get set for another 12 months in business.

Smarter Business EOFY Checklist

When it comes to being ready for the end of the financial year, there are essential steps to take and some optional considerations to think about. Here’s our quick reference checklist.

As a small to medium business owner at the EOFY, check off these items:

☐ Complete a profit and loss statement

☐ Do a stocktake. See the stocktakes page on the Australian

☐ Taxation Office (ATO) website to learn more

☐ Compile summary records of debtors and creditors as at June 30

☐ List all business assets, and include details: 

Date of purchase, price and description

Costs of additions or improvements

Details of repairs and maintenance and/or any finance arrangements

This assists calculation of depreciation expense claims and capital gains tax.

☐ List dates and proceeds from the sale of any assets

☐ Consolidate all copies of payment summaries and produce annual salary/wage reconciliations

☐ Collate your bank statements, and include: 

The nature of each deposit and expense

Total interest received/paid

Closing balance at June 30

☐ Reconcile cashbooks including any drawings taken from the business prior to banking

List details of:

☐ Any and all government-related payments, grants or rebates - 

☐ Superannuation contributions for each employee - 

☐ Insurance policies (including copies of certificates) and total premiums paid - 

☐ Petty cash expenditure 

☐ Copies of statements for all loans owed by the business (and total interest paid for the year), with balances as at June 30 

☐ Lodge yearly reports or returns for PAYG withholding, fringe benefits tax (FBT), Goods and Services Tax (GST), and the taxable payments reporting system 

☐ Travel diary and travel documentation (for you and/or your team) 

☐Details of expenditure on motor vehicles, including fuel, oil, registration, insurance, repairs and maintenance, and include: 

Current log books

Odometer readings for the first and last date of the financial year

Total business kilometres travelled for the financial year

If you are unsure about your obligations for EOFY or need more details, talk to your tax professional or visit the Australian Tax Office online.

The optional extras

In addition to the essentials, consider these:

  • If you’re a sole trader and trying to get on top of things, look at the ATO’s myDeductions tool to record your business income and expenses during the year.
  • Using an unregistered tax or Business Activity Statement (BAS) agent can be risky. Make sure your tax agent is registered with the Tax Practitioners Board (TPB).
  • Now’s the time to think about the next financial year. Ask your tax professional about any changes to tax rules or stay up-to-date via the ATO’s small business newsroom.
  • Tax time can be a time for scams. If someone contacts you claiming you have overpaid taxes and are eligible for a refund, or if a person contacts you and claims you or your business owes a debt, they could be bogus. Check the latest scam alerts from the ATO.

It’s more than money

It’s also the right time to check on your tech.

  • Review your cyber security plan, starting with 5-minute fixes and go from there
  • Are you getting the most out of the cloud, and is it secure?
  • Explore how tech can enable mobility and flexible practices to benefit your business

Think bigger, think ahead

  • Do more than the minimum – get set for the year ahead:
  • Remind yourself and your team of your business’s goals
  • Assess the effectiveness of strategies over the past year, or longer
  • Look at changes to the environment and seek ways to adapt
  • Look for new opportunities and explore ways to work smarter, not harder
  • Are you growing? Look into whether you might change business structure.
  • Check your insurance and make sure you have the right coverage for your business. If you need help, the National Insurance Brokers Association has a member database.

Information provided on this website is general in nature and does not constitute financial advice.

Start the new financial year by ending this one right

Get the Smarter checklist of EOFY essentials

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