Business owners have to stay on top of finance deadlines all year round. Right now is the perfect time to finish working on reports from your first quarter, or even make early preparations for the end of the fiscal year. Take note of these tips in order to make bookkeeping and ATO requirements easier to handle. Following due process isn’t always a nuisance when you know how to make them work to your business’s advantage.
It is important to go over your assets, including fixed ones and inventory, before everything else. Performing a complete stock take prior to reporting profits helps you avoid error penalties. Determine which of your assets need to be repaired, purchased or disposed. Depending on each course of action, you could qualify for additional tax deductions and/or claim them as expenses.
Chasing down invoices can be especially frustrating when they’re at least a couple of months old. Monitor which ones you’re still expecting to collect and which ones need to be written off as bad debt. Provided you write them off before your tax deadlines, they can be used to offset your taxable income.
These include the asset repairs mentioned above. You can also think of making interest prepayments in order to maximise immediate deductions. Superannuation payments aren’t tax-deductible until you complete them. Make sure you adjust for cash flow implications that come with completing these payments instead of simply focusing on tax benefits.
You as the business owner need to review your financial strategy regularly, so use your quarter-end and year-end markers as an opportunity to do so. Aside from complying with ATO requirements regarding the accuracy of your statements, you can use these reports to find out what your financial position is in terms of profits and cash flow. Reconcile bookkeeping records with major accounts if you have to and make sure your accounting systems are up-to-date. Work with your CFO or management consultant regarding these areas to ensure you’re seeing the whole picture.
While these reminders are quick and useful to check back on, business owners need to make sure that their overall approach to finance works. Take this TRUST Assessment to find out how you can improve each aspect of your business.