Tax Time? No Problem: Getting Prepped for EOFY
The end of each financial year (EOFY) can provoke mixed feelings in small and medium sized business owners.
But, no matter how we feel about it, the EOFY paperwork has to be done, and preparation is key to a (fairly) painless process.
Completing a few key steps before the 30 June cut off will help make life easier for the whole year, and guarantee that your business’s bottom line will continue to thrive.
Know What Your Business Can Claim
This is a big one because you need to have made all business-related purchases – whether that’s new office equipment, or repairs or replacements for existing assets – before June 30 to be able to claim, so again, preparation is key.
Other business-related expenses, such as staff wages, utility costs and insurance, may be claimable as well if you prepay. To check what your business can claim go to the ATO website.
Transition to Digital
The ideal time to start digitising your business is at the start of the new financial year. Using an online tool (such as Adobe Scan or Expensify, both free!) to scan in and upload all of your paper-based invoices, receipts, and paperwork will quickly become second nature.
Better yet, if you stay on top of the process each week or month, at the EOFY, everything you need to complete any claims will be in one place, in the same format.
As well as making sure every item stays safe and in one place, even small businesses can benefit from less storage for dusty paperwork, and feel secure that nothing can be lost or damaged.
Beware the Tax Scam
It’s not uncommon for scammers to target small and medium-sized businesses around tax time.
Different types of scams include receiving a call or email saying your business is eligible for a refund, but to claim it there’s an admin fee. Another is a similar approach, but this time the scam will claim you’ve underpaid and if you don’t pay said-amount now you could be liable for prosecution.
While some scams are easy to spot, others can be extremely convincing and aggressive, designed to scare the person into acting quickly before checking credentials. Never give out any personal or financial details over the phone from unsolicited numbers and do not click on an attachment or link within an email that you don’t recognise.
Prep, Prep, and Prep Some More
The Holy Grail of surviving EOFY stress without tearing your hair out is to prepare early and stay prepared.
Part of that means having a well-oiled, ideally digital, filing system for all your documents, invoices and receipts, updating this regularly, and having a cloud-based system that is fully protected from hacking or system failures.
Other tasks you’ll need to complete by certain dates might include compiling a profit and loss statement, completing an asset stocktake, and of course lodging your tax return.
Go to the Australia government’s guide to the EOFY for business for a comprehensive checklist that can help your business during tax time.