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Only One Month Until EOFY – Top Five Things Every Business Should Do

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Only One Month Until EOFY - Top Five Things Every Business Should Do

As the end of the financial year (EOFY) rapidly approaches, business owners must take a step back and ensure they’re well-prepared for the upcoming tax season. With only one month left until the 30th of June, now is the perfect time to review your financial situation and make any necessary adjustments to optimise your tax position.

As a leading Gold Coast accounting firm, KeyPoint Accountants understands the challenges faced by busy business owners during this hectic period. We’ve compiled a list of the top five things every business should do before EOFY to help you navigate this important time with confidence and ease.

1. Review Your Business Structure

As your business grows and evolves, it’s important to regularly assess whether your current business structure still aligns with your goals and needs. The end of the financial year presents an ideal opportunity to review your structure and consider any potential changes.

Sole Trader vs Company

If you’re currently operating as a sole trader, it may be worth considering incorporating your business as a company. Some benefits of operating as a company include:

  • Limited liability protection
  • Potential tax advantages
  • Increased credibility and professionalism

However, it’s crucial to weigh these benefits against the increased compliance requirements and costs associated with running a company.

Trust Structures

For some businesses, establishing a trust structure may offer significant advantages, such as asset protection and tax planning opportunities. The two main types of trusts used in Australia are:

  1. Discretionary Trusts (Family Trusts)
  2. Unit Trusts

Consult with the experienced team at KeyPoint Accountants to determine whether a trust structure could be beneficial for your business.

2. Maximise Your Deductions

One of the most effective ways to reduce your tax liability is by ensuring you claim all eligible deductions. As you prepare for EOFY, take the time to review your business expenses and identify any deductions you may have overlooked.

Common Deductible Expenses
  • Vehicle and travel expenses
  • Home office expenses
  • Depreciation on business assets
  • Repairs and maintenance costs
  • Professional development and training

When reviewing the above list, think about any expenses that you might normally be expecting to pay during the next three to four months, and consider if it would be beneficial to pay them before EOFY. This will only be of benefit if your company’s EBIT (Net Profit) is healthy and you might want to reduce it for tax purposes as much as possible – but remember that if you expect to generate the same, or more EBIT next FY, then it most likely will not be worthwhile.

Either way, it’s often a good time to think about things like:

  • If the company owns vehicles, do they have a service coming up, could they do with a detail, or new tyres?
  • Are there office-related expenses you’ve been thinking of purchasing – such as a new printer, computer, device, furniture, etc., and you might as well put a general stationery order in to perhaps make the most of some EOFY sales?
  • Are there any overlooked repairs and maintenance to any of your assets including the office space, that you might as well expense this FY?
  • Training. Is there any compliance, or professional development-related training that you and/or your team would benefit from, or should be, doing, i.e. fire training, WHS, or AI-related education?
Prepaying Expenses

Consider prepaying certain expenses before June 30th to bring forward deductions into the current financial year, but again, the same as above, this is only worthwhile if you have excess EBIT to try and reduce. Some expenses that can be prepaid include:

  • Rent
  • Insurance premiums
  • Subscriptions and memberships
Record-Keeping

Remember to keep accurate records of all your expenses to support your deduction claims. Ensure you have the following documentation:

  • Receipts
  • Invoices
  • Bank statements
  • Logbooks (for vehicle expenses)
Cash Flow Review and Management for Business Success

3. Manage Your Inventory

Effective inventory management is crucial for businesses that deal with stock. As EOFY approaches, take the opportunity to review your inventory and make any necessary adjustments.

Stocktake

Conduct a thorough stocktake to determine the value of your inventory at the end of the financial year. This will help you:

  • Identify slow-moving or obsolete stock
  • Adjust your stock levels to meet demand
  • Accurately calculate your cost of goods sold (COGS)
Inventory Valuation Methods

Choose an appropriate inventory valuation method that aligns with your business needs and industry standards. The three main methods are:

  1. First In, First Out (FIFO)
  2. Last In, First Out (LIFO)
  3. Average Cost Method
Write Off Obsolete Stock

If you identify any obsolete or damaged stock during your review, consider writing it off before June 30th. By doing so, you can claim a deduction for the value of the stock written off, reducing your taxable income.

4. Review Your Accounts Receivable and Payable

Managing your cash flow is essential for the success of your business. As EOFY approaches, take the time to review your accounts receivable and payable to ensure a healthy financial position.

Accounts Receivable
  • Follow up on any outstanding invoices
  • Consider offering early payment discounts to encourage prompt payment
  • Write off any bad debts before EOFY
Accounts Payable
  • Ensure you have paid all outstanding invoices
  • Take advantage of any early payment discounts offered by suppliers
  • Consider prepaying some expenses before EOFY to claim deductions
Write Off Bad Debts

Identify any uncollectable debts and write them off before June 30th to claim a tax deduction. Ensure you have documentation to support the write-off, such as records of attempts to recover the debt.

5. Plan for the Future

The EOFY is not only a time to review the past but also an opportunity to plan for the future. Take this time to reassess your business goals and develop strategies to achieve them in the new financial year.

Set SMART Goals

Establish Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) goals for your business. These goals should align with your long-term vision and be broken down into actionable steps.

Develop a Budget and Cash Flow Forecast

Creating a comprehensive budget and cash flow forecast is essential for managing your business’s financial health. By projecting your income and expenses for the coming year, you can identify potential cash flow gaps and make informed decisions about investments, staffing, and growth strategies.

Plan for Succession

If you’re a business owner nearing retirement or considering an exit strategy, EOFY is an ideal time to review your succession plan. Whether you’re planning to sell your business, pass it on to family members, or transition ownership to employees, having a well-defined succession plan in place can help ensure a smooth transition and protect the value of your business.

Make This EOFY a Turning Point for Your Business

As the end of the financial year draws near, taking proactive steps to review your business’s financial position and optimise your tax strategy is essential. By focusing on these five key areas – business structure, deductions, inventory, accounts receivable & payable, and future planning – you can set your business up for success in the new financial year and beyond.

Our Gold Coast Accounting Firm KeyPoint Accountants is here to support you through the EOFY process and beyond. Reach out to us today at 07-5585-0600 or info@keypointaccountants.com.au to schedule a consultation. With our expertise and personalised approach, we can help you navigate the complexities of tax time and develop strategies that drive your business forward. 

Contact KeyPoint Accountants for Business Accounting & Advisory
Picture of Chris Dobbie

Chris Dobbie

Chris Dobbie is the Principal of KeyPoint Accounting & Advisors, based on the Gold Coast, Queensland, Australia. Chris is a leading Certified Practicing Accountant (CPA) holding a Bachelor of Commerce (B. Com.), Accounting from Griffith University. Chris has over 22 years of professional accounting and taxation experience. Having stepped his way through this family business to now be Managing Partner, Chris, along with his expert team, look after a diverse client base ranging from medium sized businesses to national/multinational businesses. Chris is truly passionate about improving and growing his company's clients businesses, their lives and lifestyle, with a focus on innovative strategic approaches, and strong communication with clients. View Chris's LinkedIn profile.

About Keypoint Accountants: Innovative Gold Coast Accounting for Your Business

WE’RE ABOUT YOUR BUSINESS TRANSFORMATION: Our goal is to transform YOUR business with better strategic action. Our team delivers excellence in Accounting and practical strategic advice helping you to grow your business exponentially. We guarantee results.

ENABLING THRIVING BUSINESSES: We have helped thousands of businesses locally and nationally for over 50 years! The Keypoint specialist team has forged a reputation for helping transform businesses from conception to succession.

WE MOVE YOU: Our integrated services – Strategic Action, Accounting and Financial Health checks have been created to move your business in line with your vision:

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