Getting your business ready for EOFY

Yep, it’s that time of year again – 1 July 2023 is looming, and you need to get your ducks in a row. You not only have to be ready for the new financial year, but you should also be tying up the previous year by ticking off some tasks that tend to fall by the wayside.

That’s right – it’s time to spring-clean your small business financials!

Basic EOFY checklist

First up, there are some basic compliance must-dos you’ll need to take care of. The good news? Many of these tasks can be performed by making full use of your accounting software.

• Complete your BAS.
• Reconcile your bank accounts.
• Reconcile your PAYG withholding payment summary report and payroll tax.
• Create a profit and loss statement.
• Update your balance sheet.
• Do a stock take.
• Locate all receipts and proof of business expense purchases.
• Make sure you meet your superannuation requirements.
• Create work-from-home records if applicable.
• Run reports on accounts receivable and accounts payable.
• Run a cash flow report.

See our EOFY guide for an outline of how to go about many of these tasks and some further considerations.

Get on the phone with your advisor now

Before the new financial year closes in, get in touch with your advisor, accountant, or bookkeeper. (Remember, this is their busiest time of year – so be sure to reach out at your earliest convenience).

First off, your advisor can remind you about any tasks you can perform now to make sure you’re ready for your tax return and other EOFY deliverables.

Ahead of an EOFY meeting with your advisor, you can save time and money – not only by reconciling your accounts and fixing mistakes – but also by generating reports. In other words, do some of the busywork now, lest you (and your advisor!) be overwhelmed last minute.

Seeking local advisors near you? Use our free search tool.

Some new rules this year to remember

For the 2022/23 financial year, there are a few new EOFY considerations. While your advisor can help you navigate them, it’s always good to have a handle on them.

• New Instant Asset Write Off rules! The rules have changed around IAWO, meaning you need to be aware of what’s ending and what’s commencing, especially if you have asset purchases in mind.
• Temporary full expensing will end on 30 June 2023. This means if you wish to take advantage of this measure, you need to have purchased your intended asset and have it installed and ready for use before EOFY.
• An energy incentive for small businesses will kick off on 31 July 2023. It includes a bonus tax deduction of 20% for assets that support electrification and energy efficiency. (So, if you intend on installing energy-efficient equipment it may be worth waiting, despite the end of temporary full expensing.)
• Work-from-home records and methodology have changed as well, (specifically the fixed rate method of claiming WFH deductions.) The fixed-rate method has been upped to 67 cents per hour from 52 cents, however, this now includes energy, mobile phone use, internet, and stationary. In addition to changes to fixed rate deductions, instead of providing a one-month exemplary record of working from home, from 1 March 2023, you must provide a more detailed one-year diary in excel or a similar fashion.

It’s always best to speak to your advisor about assets, deductions, depreciation, and the best WFH deduction method for your specific circumstances.

Use this opportunity to do a year in review

Despite being an incredibly busy time for small business owners, EOFY is a fantastic opportunity to reflect on the previous year. You can gather learnings from a wide range of financial reports on profit and loss, cash flow, budgets, expenses, balance sheets.

• What worked?
• What didn’t work?
• Where is my biggest opportunity for profitability and growth?
• Should I change directions or cull certain products or services?
• Is my business on a sustainable trajectory?
• Can I reduce expenses or make better use of resources?

Tune up your business plan

Your business plan should be a living document updated regularly. Based on your above learnings and with support from your business advisor, why not pull out your business plan for review around now too?

Make all necessary updates and get ready for the year ahead with a freshened plan of action, driven by updated metrics and motivators.