With one month to go until the end of financial year, around one third of SMEs are making inroads into their financial reporting obligations – the majority however, will leave it to the last minute.
A survey by MYOB reveals the majority of SMEs have worked weekends, worked beyond midnight, turned down social events, and been unable to take planned holidays due to a lack of EOFY preparedness.
“It’s tempting to put the books on the backburner, however lack of preparation is often the reason why June 30 fills business owners and their loved ones with dread,” MYOB CEO Tim Reed says.
MYOB has prepared these top tips to help businesses prepare for EOFY:
1. Meet with your business advisor before the financial year ends. Failing to plan is planning to fail, as they say. Potentially save time and dollars by meeting with your business advisor before the financial year finishes.
Ensure your info is up to date so that your balance sheet is accurate and reflects your business’s true financial position.
2. Get organised. A pile of confusing receipts, unfiled invoices and no system to manage them is not the best way to run a healthy business. Set up a bookkeeping system and document your process.
Your accounting software contains helpful steps to follow. And remember: maintaining and updating your business records regularly will help alleviate the pressure of EOFY. Consider blocking out time in your diary for paperwork each week or fortnight.
3. Familiarise yourself with key compliance changes. If you operate a business in the building and construction sector, are your systems prepared for your first Taxable Payments Annual Report of contractor payments before 21 July 2014? Are you familiar with SuperStream? Check out this fact page for everything you need to know about EOFY compliance changes.
4. Plan your tax. Your business advisor can help you estimate what your tax situation will look like for the April to June quarter before it finishes. Tax planning should be long-term – the decisions you make today may impact your business for years to come.
For example, do you want a tax deduction on your superannuation contributions? Or are there any potential deductions, write-offs and rebates that you can take advantage of? Take action prior to June 30.
5. Adopt technology to drive productivity. Technology can transform the way we communicate, capture and store information. Using cloud accounting solutions can help you organise and track your financials, build a clearer picture of your financial circumstances, and helps keep you compliant.
Review your accounting software to determine if it’s the right solution for your current position – whether moving to cloud accounting or using add-on solutions.
6. Revisit your business plan. EOFY shouldn’t be all facts, stats, dollar signs and reports. Now is an ideal time to either write a business plan or reassess the one you have to ensure you’re on the right path for this financial year.
Strategic planning is essential to maintain your business’s ability to stay healthy, adapt and grow over time. Having a passion for what you’re doing is very important – it will carry you through the late nights and long weekends – but it’s not a substitute for a solid business plan.