We’ve talked about what you need to do to process your payroll year end here, now let’s go through the things you need to do before the end of the financial year for the business.
Of course, after the end of the year it’s important to prepare your accounts ready to send them to us (or your accountant if, heavens forbid, we’re not your accountant).
But what are the things you need to do now before the end of the year? Below are the 3 key things that you need to do now:
Make sure all super & bonuses are paid before the end of the year
Often extra payments to super or as a bonus form a part of your tax minimisation strategy.
Not only does it need to be included in the payroll calculations you also need to make sure you’ve paid the actual payment. The money must have been paid out of your bank account before the end of June.
If it isn’t then you won’t be able to claim that against your tax and you’ll lose the benefit of the strategy. This includes the super for all your team. If it hasn’t been paid then we can’t claim it as an expense to reduce your tax.
In fact, having outstanding super nowadays can be a real problem for you. The ATO know exactly how much you owe and can penalise you for late-payment or non-payment.
If, for whatever reason, you have an amount outstanding for super then please make sure you get in contact with us, it’s a complex area that we need to make sure you’re addressing.
Make sure you’ve completed the purchase of any assets for instant write-off before the end of the year
The instant asset write-off scheme currently in place is a great way of potentially minimising tax, but again this needs to be actioned before the end of the financial year.
The key thing here is that if you are planning to buy an asset in your business then buying before the end of the financial year will help to reduce your tax.
Don’t buy things you don’t need or weren’t planning to buy anyway. You might save some tax, but you’ve still got to pay for the asset and that means you’ll be paying money out even after taking your tax reduction into consideration.
It doesn’t even make it cheaper, this scheme just speeds up the tax reduction from buying the asset so that you get it all straight away. It’s still good and helps to fund assets that you need for your business. Just make sure you’ve completed the purchase before the end of the year
Make sure you put a financial plan in place for the next financial year
The end of the financial year is the ideal time to put a plan together for the next financial year. This should include a financial plan.
We discussed this in a recent blog here. The key things you need for a financial plan are to calculate your break-even and to prepare a budget for the next financial year. I’m in the process of putting mine together right now and you should be doing the same.
This should include a sales forecast as well as a budget for your fixed costs. This can then be used to hold you and your team accountable and help you improve you results.
`The end of the financial year is also a good time to change accounting software if you need to. We wrote a blog recently about that here. It’s also a good time to make any changes to your business structure, if required. Contact Wear Accountants the Accounting Firm today.
Next Step
We hope you find the above information useful.
If you need any help with any of the issues above, we’d be happy to help you. Simply call 07 5649 7650 to talk to one of the team.
