As the end of financial year draws nearer, it’s no surprise that many SMEs are feeling the pressures of juggling business priorities with tax time. The 2015 MYOB Business Monitor survey of more than 1000 small to medium business owners found that 37% of SMEs have to work weekends to meet EOFY demands. Given the competitive business environment and increasing time pressures on business owners around Australia, SMEs are already under immense pressure, and adding EOFY activity can be a huge burden.
There is still time to get your accounts in order however, and there are a few steps business owners can take in order to reduce the stress of the EOFY, no matter what financial stage they are at.
1. Take advantage of deductions, write-offs and rebates before June 30
Talk to your accountant in regards to the deductions, write-offs and rebates available to your business before June 30. You need to talk about what to do with worthless stock, plant and equipment and review your asset register (which keeps track of your company equipment including items purchased, sold or disposed of).
2. Take advantage of 2015 budget changes
The recent budget announcement has created a great opportunity for SMEs, with the $20,000 immediate asset write-off allowing for large tax reductions this EOFY. SMEs should think about how they want to spend this, and invest in technology upgrades, infrastructure and equipment now to allow for a more profitable year ahead.
3. Review what is and isn’t working
SMEs should talk through what business changes they would like to make post EOFY, and how these can be achieved. Consider discontinuing business activities that don’t add much value, and redirect attention to profit making activities. Activities that aren’t generating business benefits can then be written off in terms of equipment and labour, leaving more money for activities that are generating real business growth.
4. Consolidate bad debts
For those debts that have been outstanding for more than 12 months which may be non-recoverable, SMEs may have the option to claim a GST credit and write them off as an expense. Business owners need to look at this option now in order to work their EOFY smarter rather than harder.
5. Consider the cloud
The Business Monitor reveals that over 1/3 of business owners work weekends and 22% of business owners work past midnight in preparation for EOFY. But, SMEs can save on average of 10 hours of admin a month by using cloud accounting features like automatic bank reconciliations using MYOB BankLink. With a quick review of SME’s current accounting software, business owners will be able to pin point what time and cost savings can be made this EOFY.
Starting the new financial year on the front foot will mean less stress, and a well thought-out business plan for the coming year. In this competitive market, SMEs should look to solutions for driving success, through forward planning and brave decisions around what is and isn’t working moving forward.