The tax time can strike dread in the hearts of business owners, with the combination of fear stress, anticipation and sheer boredom the entire process entails. However as the calendar moves every closer to June 30 it is important that businesses take the time to assess their financial position, plan for the future and conduct any legal requirements.
There are a few key areas that every business should consider to ensure you are ready for your upcoming tax return and completing your final Business Activity Statement. They primarily relate to ensuring all your financial aspects are in order, something easier said than done.
Reconcile your receivables which typically involves finalising any outstanding payments and working out any unrecoverable debts which you can claim as a tax deduction.
Retail and Product based business should use this time to assess their stock. If you have any that have been damaged, this can also be used as a write-off. This also applies to any investments, if you have any that can be sold to offset losses this can have a positive impact come tax time.
Many business owners use pre-pay strategies to claim a tax deduction on services and supplies required. This can also involve deferring income to reduce your taxable income for the financial year.
Superannuation is a tricky subject and one that often causes the most headaches for business owners and employers. The most important point is to ensure you are on top of all your obligations before the tax season and you will receive a deduction for all the superannuation you are required to pay.
We talked about this briefly in our last blog post however the end of the financial year is also a good time to plan for the future. Develop a forecasted profit/loss plan for the next 12 months and review any insurance cover. Something top business consulting companies specialise in, this process can also bring to light any future risks and allow you to more effectively plan for any changes.
The final step would not be valid for every business owner, however, if you are uncertain about your continued business success it might be worth developing a succession plan. This is particularly important if you are in business with other people.
These few steps can make the world of difference to your next financial years’ success. However, if you are not certain of where to start, it is worth acquiring an outsourced accountant’s service. At TR Consulting, we specialise in connecting small businesses with the services that will make their job easier. So you are facing tax season and do not know how to begin, contact us today.