EOFY for first-time business owners can be a particularly daunting time.
But you don’t have to feel like you’re lost in the wilderness. We’re going to cover everything you need to set off in the right direction.
End of Financial Year. EOFY. It’s a topic that tends to get spoken about quite a bit over the course of one or two months each year, but why is it so important?
EOFY can mean different things to different people, but understanding what it means for you in terms of your obligations to the Australian Taxation Office (ATO) is critical for staying on the right side of the law.
EOFY for first-time business owners
For the new business owner, EOFY means your business activity needs to be recorded and submitted through a tax return.
This means collating invoices, receipts, bills, payroll information and other documentation to substantiate claims for your fledgling organisation.
Also, your process for this should include a bookkeeper and/or tax agent. Given it’s your first EOFY, we highly recommend you consult a qualified advisor.
Understanding tax implications for your business can be complex, and ensuring you get it right is the role of your advisors.
Accounting software is essential to ensure that you are capturing all the requirements for your business throughout the financial year and giving you peace of mind that come end of financial year the process of reviewing your tax will be easier for your advisors.
Whether you’re a sole trader or a growing business in need of powerful management solutions, we’ve got you covered.
COMPARE PLANS TODAY
Here are some important tips and resources for you to consider as we move towards this busy time of year:
1. When does the current financial year end?
The Australian income tax year ends on 30 June 2024
2. How do you understand your tax obligations?
By having real-time reporting through accounting software and working with your bookkeeper and/or accountant now to plan for the end of financial year tax obligations, you are well placed to understand the implications and set yourself up for success.
If you’d prefer to understand this process yourself, the ATO has created a range of calculators to assist you.
3. Claiming expenses
There are a wide range of expenses that may be claimed for operating your business.
If you are unsure about what can be claimed, consult your advisors. But remember to substantiate most claims, you’ll need invoices and/or receipts.
A great way to capture your expenses seamlessly is through the MYOB Capture App. It gives you a central location for all your documents, which means less stress for you at tax time. It also gives easier access for your accountant and bookkeeper so you’re always compliant.
Also, capital expenses may be calculated by depreciation or asset write-off.
For more information on this and how much you can claim its always best to consult your advisors.
Moreover, to understand this area more, check out the ATO’s depreciation guide.
4. Write-offs, deductions and rebates
There could be write-offs, deductions and rebates that apply to your business.
To find out, talk to your advisors well before 30 June to ensure you can take advantage of these measures.
5. Stocktakes and Inventory Management
If you have stock you should perfom a stocktake to ensure you value this stock on hand accurately.
Check your stock for anything that is damaged or you can’t sell because you may be able to write it off.
6. Backups, backups and more backups
In an online environment you need to ensure you collate a comprehensive set of reports to validate the financial year data.
Particularly, this set of reports should include, balance sheet, profit and loss statement, trial balance, detailed general ledger, bank reconciliation, inventory reports, payroll and leave information and any other reports relevant to your operations.
Make sure you save these reports to a secure environment for at least 5-7 years following the lodgement of that year’s income tax returns.
7. Summary
Undoubtedly, EOFY can be daunting if it’s your first year in business.
By surrounding yourself with a great team of advisors in your bookkeeper/accountant and using the excellent business management tools that MYOB have on offer you can set yourself up for success.
Capturing all your documents, claiming your expenses, and understanding all your obligations will help to minimise that daunting feeling.
Also remember that EOFY is a great time to review and see what was successful to plan for the future.
Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.
MYOB is not a registered entity pursuant to the Tax Agent Services Act 2009 (TASA) and therefore cannot provide taxation advice to clients. If you have a query concerning taxation including filing your BAS return or annual tax statements then you should consult with your accountant or other registered tax adviser.
