Don’t go making crazy purchases without reviewing where you are at, and speaking to your tax accountant. EOFY deals are great for salespeople trying to meet their commission targets, they might not really benefit you and your business.
Review your position
You can’t make sensible last minute decisions without data.
Take a look at your bottom line – before hitting the shops.
Let’s get your Xero file up to date, process everything still outstanding so you know exactly where you stand. There is not a lot of benefit spending more money, if you are already in a loss position. If you are in a surprise profit situation, it would be good to know before its too late to take action.
Owe money to your business?
Speak to your accountant about potential division 7A issues & tax consequences of loans to associates
If you cannot repay your business you’ll need to look at a formal loan agreement, your accountant can help you. Don’t get caught by deemed wages.
Review your wages
Will you reach the payroll tax threshold?
Caps are prorated if you operate in multiple states.
If you’ve tipped over the threshold this year, you’ll need to register and make payments. Check the rules in each state you operate in, certain contractor payments may be included in wage calculations. Be aware of entity grouping.
Review open sales invoices
Chase up open sales invoices.
No chance of collecting? Write off bad debts and start the new year fresh
Tidy your accounts receivables to start the new financial year, review all open sales and chase up the slow payers.
We may need to issue credit notes or write off sales that you will not receive payment for.
Review open purchases / bills
Are they really payable?
Have you paid them out of the wrong bank account?
Review your accounts payable for accuracy, are there bills sitting there that you know are paid?
What about bills you won’t pay, perhaps they were issued in error or the service was never delivered, request credit notes.
If you lodge on a cash basis:
All payments made in June will result in deductions in this financial year.
Payments made in July will generate deductions for next financial year.
If you are still reporting under the Simplified Tax System, you may be able to prepare your tax return on a cash basis (sales income received and bills paid, not sales issues and bills received). Paying a bill on 30th June or 1st July can make a difference to your situation.
If you report on an accrual basis – a bill dated in June but not yet paid, will still be considered an expense in this financial year.
The end of the financial year is nigh, now is the time to prepare yourself. Make sure you take advice from licenced professionals.
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