30th May, 2018
Tradies would know that for most jobs, being prepared and having the right tools for the job at hand is vital. EOFY is no different.
For most tradies, bringing up the end of financial year is enough to elicit a groan and a few choice words.
Nobody enjoys all the extra work that comes along with having to lodge a tax return, plus BAS, payment summaries, and other paperwork.
But it’s possible to escape this time of year with your blood pressure at a decent level – you just need to follow a few steps to get organised.
1. Have a planning session with your accountant
Rather than leaving everything to the last minute, speak with your accountant in advance to find out exactly which items you need to get to them, and by when.
They can also help you work out all relevant deductions, write-offs and rebates which are available to you.
RESOURCE: Find a great accountant here
2. Input data before the end of June
To reduce stress, stay on top of your paperwork before the end of the financial year even hits.
Take a few minutes each day to enter all new sales, payments, purchases, receipts and so on into your accounting software.
3. Purchase equipment or other items you’ll need for the new financial year
Now is the best time to invest in buying new equipment or other items for the coming year.
You will be able to claim these on your tax, plus enjoy the benefit of shopping when the EOFY sales are on and goods are discounted.
READ: How does the $20,000 write-off work?
4. Do a stocktake on June 30
To maximise the amount you can claim on your tax, and reduce your tax liabilities as a result, you should do an end-of-financial-year stocktake.
Go through all your inventory and parts to see if there has been anything lost, stolen, or broken over the previous 12 months.
5. Reconcile your payroll
Do you have an apprentice and/or other people working for you? If so, check everything is up to date and correct when it comes to payroll.
In particular, take care of superannuation payments, and PAYG payment summaries (group certificates) for employees.
6. Reconcile bank accounts
It’s important to check that all the balances in your accounting program match the deposits and withdrawals on your bank statements. You also want each transaction to be coded properly.
Mistakes can happen, usually because you have entered incorrect information (or your accountant or other person has).
The sooner you find and fix any discrepancies, the easier it will be to complete your EOFY paperwork.
7. Reconcile your accounts receivable and payable
Check where things are at with regards to outstanding invoices you’re waiting on payment for, and bills you need to pay yourself.
Chase debtors up and try to get as many unpaid accounts settled up as you can before the end of the financial year.
To make sure you don’t owe any money to suppliers that you’re not aware of, ask for statements from each of the companies you deal with.
See if their records match yours. Investigate anything that doesn’t seem correct. This will help to stop issues from escalating.
Read this next: Accounts receivable: ultimate guide for small business owners
8. Forward on all the information your accountant or bookkeeper requires
Collate all the financial date your accountant or bookkeeper requires to complete your tax return and other paperwork.
You will probably need to gather up receipts, bank statements, credit card statements, loan statements, and details on kilometres travelled in work vehicles.
Most advisors will be able to provide you with a list of items they need, so you can tick off things as you go.
9. Prepare for the coming year
The end of financial year is a great time to get organised for the year ahead.
Look at your business plan and financial reports to see what you’ve achieved in the last 12 months, growth- and profit-wise.
Determine which goals are still remaining, too. Some may need to be changed, so update accordingly.
READ: How to use EOFY to set yourself up for success
Analyse why some things may not have turned out as expected, and what you can do differently next time.
Try to learn from your setbacks as much as possible.
If you don’t have a business plan, create one that covers factors such as your sales and marketing strategies, new service ideas, financial projections, and a SWOT (strengths, weaknesses, opportunities and threats) analysis.
If you have a business loan or other liabilities, now is a good time to see if you renegotiate for better terms, too.