One of the most dreaded acronym’s is EOFY – placing the fear amongst business owners. However, the end of the financial year (EOFY) planning doesn’t need to be daunting. With some planning and preparation, you can take stock of what has and hasn’t work for the past 12 months. Time to work towards receiving the right tax outcomes for your business commencing with the basics:
- Ensure your financial records are up to date
- Consider saving time by utilising online banking
- Identify what items you may be able to claim deductions
- Decide if you wish to leverage tax-incentive superannuation requirements if you are building your retirement savings
- Diarise relevant dates when documents are due for submission.
How do you navigate your business finances for the end of financial year?
You have worked hard all year negotiating deals and investing time foster client relations, however many businesses neglect to invest time ensuring they receive the right deductions to maximise their expenditure and gain a comprehensive understanding of what is claimable. For example, the Federal Government has introduced an instant asset write-off scheme for small businesses. Therefore, it makes good business sense to leverage this and other multiple business stimulation incentives.
In fact, now is a good time to act, as opposed to post 30 June to assess whether your business requires new office equipment, or if existing equipment needs to be repaired or replaced. Why? Because you can also claim deductions if you prepay certain expenses for 12 months or less, such as professional subscriptions, electricity, rent, wages, insurance and utilities, to name just a few.
Coraggio, CEO, Richard Skarzynski cites,
“Managing successful financial planning strategies should be a continual process through the year, however I recommend to our Members to prepare their end of financial year promotions to take advantage of last minute spending”.
Certain contributions have the ability to reduce your taxable income, or see you pay less on investment earnings.
Cited by leading accountant Sue McKeen from PG&A Accountants and Advisors and Coraggio Member, to get your business tax-ready, simply follow these tax tips:
- Check your Profit & Loss and project forward to 30 June, 2021 to see likely profit and tax payable, so you can plan for the tax payments
- Remember, JobKeeper is fully assessable so will be taxed
- Look at your Debtors and write off any Bad Debts
- Utilise the Instant Asset Write off, however only if you require the item
- Bring forward spending – prepay expenses up to 12 months (interest, rent, insurance, subscriptions etc..)
- Defer income (consider holding off invoicing @ 1 July to move income into the 2022 year) BUT consider cash flow
- Do a stocktake and write off any obsolete or damaged stock
- Review Depreciation schedule and write off obsolete or unused items
- Make additional Super contributions (threshold $25,000)
- Talk to your Accountant!
Embrace this time as an opportunity to start afresh and a business health check
As you dissect your profit and loss statements for this financial year, you may discover that your actual sales and margins don’t necessarily match up with your perceptions. Assess with a lens to understand any differences and discuss with your sales people, business development teams and consulting your website analytics.
- Identify your financial goals
- Structure your existing assets appropriately
- Assess your approach to investment and your appetite for risk
- Review your current superannuation arrangements.
The Association of Superannuation Funds of Australia (ASFA) estimates to support a comfortable lifestyle to retire at aged 55 years is $640,000 for a couple and $545,000 for a single person. This is dependant on many factors, such as your lifestyle, plans for the future and the number of years you’ll spend retired. Additionally, estimating how much you’ll have when you plan to retire depends on factors such as your current salary, super balance and assets.
For Australians on above-average incomes, another rule of thumb to estimate how much money you’ll need in retirement is to assume you will require 67% (two-thirds) of your pre-retirement income to maintain the same standard of living.
How do you obtain other business operational, financial and advisory advice?
It’s simple – peer to peer mentoring provides access to great business minds and drawing collectively on their combined industry experience, filling skill gaps in your knowledge and receiving impartial, insightful advice.
Enhanced supportive learning experiences from key opinion leaders and industry keynote speakers, are proven methods for becoming one of the best influential leaders.
Anything you can learn by yourself you can learn faster guided by a diverse array of experienced industry leaders facilitating fearless objective advice!
We encourage you to leverage Coraggio’s support system and capitalise on a give-and-take dynamic amongst people who have walked the path before, mitigating your business risk whilst future-proofing a sustainable business.
What is Coraggio?
Operating a business typically presents complex issues to deal with, sometimes on a daily basis. Imagine if you could leverage the experience from an extensive group of industry peers to improve your decision-making and future-proof a sustainable business, whilst being held accountable?
Also imagine if you gained the peace of mind to seamlessly access these answers and navigate other business challenges, simply by connecting with entrepreneurs and business leaders? This is the strength of peer to peer and leadership mentoring.
Coraggio offers a mutual exchange of Member’s expertise, ideas and a support system enabling you to capitalise on a give-and-take dynamic amongst advisors who have walked the path before mitigating risk to your business, resulting in sustainable revenue streams, increased cash reserves and productive business outcomes.
Leading business owners and entrepreneurs join Coraggio to become part of a highly effective business community guaranteeing leadership, facilitating accountability and sharing innovative ideas within a cohesive and confidential national network.
Coraggio Chairs are industry leaders, members are forward-thinking advisors and all Boards are dedicated to the ongoing success of their fellow member’s businesses, offering Fearless Objective Advice – that’s the Coraggion Spirit!
Afterall, in the words of Henry Ford
“If everyone is moving forward together, then success takes care of itself”.