If you find yourself behind the eight ball each year when the end of financial year rolls around, then it might be time for a bit of a refresh. Instead of burying your head in the sand, review your processes and implement a few key initiatives to cruise into the new financial year with confidence. Here are a few ideas to help take the sting out of tax time.
1. Find out what you need to lodge and when
When it comes to tax, what you need to lodge and when depends on how your business is structured. In addition to your individual and company tax return, you may also need to lodge a business activity statement (BAS). This typically applies if your business is registered for good and services tax (GST) or withholds tax from employees.
Once you know what you need to lodge, check the due dates for each and decide how you plan to lodge – whether via the ATO’s myTax system for individual returns, their Business Portal for your BAS, or a registered BAS agent.
2. Start early
Many business owners are lulled into a false sense of security by due dates that appear to be some time away. This often leads to a last-minute scramble to lodge the day before it’s due. While it’s tempting to put it off, leaving tax matters to the last minute isn’t advisable. If you’re rushing to pull everything together and file the necessary paperwork, you’ll likely make mistakes or overlook potential deductions. So, get a head start and put the appropriate plans and processes in place as the new financial year begins.
3. Embrace the cloud
Maintaining accurate records – sales, invoices, expenses – is the key to tax-time success. Thanks to the cloud, the days of stashing faded receipts in shoe boxes or manually sending invoices manually are over. Cloud-based accounting tools, such as QuickBooks Online, store all your financial data in the one place, making tracking your GST and preparing your BAS far easier come tax time.
4. Schedule time for financial administration
Financial admin is often the thing that ends up on the bottom of your to-do list. Of course, when business is booming, it’s wise to focus on servicing your clients, not keeping records. The risk with this approach is that you arrive at the end of the financial year with your accounts in a mess and a backlog of work you need to catch up on. Putting time aside each month to prepare for EOFY is one way to avoid this. Simply block out a few hours of each month to reconcile your accounts, so when tax time rolls around you’re in good shape.
5. Hire an accountant
If there’s no time in your diary at all for financial admin and things are beginning to spiral out of control, it might be time to call a professional. A good accountant will tell you what tax concessions you’re eligible for, advise you on how to maximise your deductions, and help you lodge everything on time.
Hiring an accountant is tax deductible too, so it’s worth the investment if you’re feeling the pressure. Tax time doesn’t have to be stressful. Plan ahead, start early, and get onboard with cloud-based tools, and you’ll pass tax time with flying colours.