The Countdown Begins: Preparing for the End of the Financial Year

countdown to the end of financial year 2023/24

Time flies, especially when you’re running a business. Before you know it, the end of the financial year (EOFY) is upon us, bringing with it a host of tasks and considerations for small business owners, sole traders, and diligent taxpayers alike. To help you smoothly transition into the next fiscal chapter, we’ve put together essential tips to tie up your financial loose ends effectively.

EOFY Checklist for Small Businesses and Sole Traders

Review Your Accounts

Take the time to review your accounts before the EOFY. Ensure that all transactions are recorded correctly and that your ledgers reflect the real state of your business finances. This is also a prime time to reconcile your bank accounts and confirm that customer invoices and supplier payments are up to date.

Inventory Management

Conduct inventory checks to ensure that your stock records are accurate going into the new year. Discrepancies can affect your cost of goods sold and subsequently, your profit margins and tax obligations.

Deduction Opportunities

Don’t miss out on any deductions available to your business. Keep an eye on expenses that you could claim such as office supplies, software subscriptions, hardware purchases, professional development, and other business-related expenditures. Consult with your accountant or a tax professional to make sure you’re capitalizing on these opportunities.

Asset Write-Offs and Depreciation

Stay informed about instant asset write-off thresholds and rules for depreciation. Purchasing new equipment before the end of the financial year can be advantageous if it means leveraging a timely tax deduction.

Debts and Bad Credit

Get tough on overdue accounts. Remember, unrecovered debts can be written off as bad debts, but you’ll need to demonstrate that you’ve made a genuine attempt to recover these amounts before writing them off.

Tax Compliance and Documentation

Ensure your tax records are thorough and compliant with local tax laws. Preparing proper documentation for expenses, sales, and other tax-related matters is not just a legal responsibility — it’s an invaluable habit that could save you from troubles down the line.

Cash Flow Forecasting

EOFY is a perfect moment to review your cash flow and compare your financial expectations against the reality of the past year. Use this insight to adjust your business plans and cash flow forecasts for the upcoming year.

Seek Professional Advice

Finally, consider engaging with a financial advisor or an accountant. They can provide personalized advice, ensuring your business is taking the right steps towards financial optimization.

Takeaways for the EOFY Rush

  • Start Early: Procrastination is the arch-nemesis of EOFY preparation. Start your reviews and checks early to avoid last-minute stress and potential errors.
  • Get Organized: Keep your records, receipts, and documentation orderly and easily accessible.
  • Invest in Good Software: Consider investing in accounting or bookkeeping software to streamline financial record-keeping tasks.
  • Stay Informed: Tax laws and financial regulations can change. Keep abreast of the latest developments to avoid compliance issues.
  • Set New Goals: Reflect on the financial year’s performance, celebrate your successes, and set new goals for the year ahead.

EOFY doesn’t have to be daunting. A little preparation and planning can go a long way in setting your business up for success in the new fiscal year. Stay proactive, seek out support when you need it, and look forward to the opportunities that the new financial year will bring!

Remember, EOFY is also a reminder of growth and progression. It’s a time to reflect on what you’ve achieved and plan strategically for the future. Here’s to closing this chapter on a high note and welcoming a prosperous and promising new financial year! 🥂

If you are interested in learning more about anything raised in this blog, contact us today. 

This is general information only and does not constitute advice. 

If you or someone you know would like more information or require advice about anything raised in this article, please contact us on email dmcnally@mcnallyaccountants.com.au

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