EOFY business accounting tips
With 30 June looming, it’s time to start getting your business accounting prepared for the end of the financial year (EOFY).
We know that for many businesses it’s been a challenging twelve months, but it’s important that you don’t miss out on tax minimisation opportunities.
You want to make sure you take advantage of as many deductions as possible.
We’ve put together a list of tips to help you achieve the best outcome this EOFY. By taking action now, you can minimise last minute stress.
“With 30 June looming, it’s time to start getting your business accounting prepared for the end of the financial year — don’t miss out on tax-minimisation opportunities.”
Keep records up to date
We say it all the time, but keeping your financial records up to date is a critical part of business accounting.
You need to make sure you have access to all your invoices, expenses and deductions, asset records and bank statements.
Utilising a cloud based accounting system such as Xero can help streamline your record keeping and assist with regular bank reconciliations and reports.
Your records need to also include information relevant to your activity statements, employee super contributions and any GST obligations.
If you haven’t already started getting this information organised, we recommend it be one of your first tasks, as you can quickly identify areas that need additional attention.
Write off bad debts
If your business is registered for GST and you pay on an accruals basis, you could make a tax deduction claim for bad debts.
The claim could provide you a refund on GST that you have previously paid, as long as you include the debt in either your BAS for the June quarter or your annual GST Return.
You must make sure that the bad debt is written off before 30 June and that you can provide evidence that it was irrecoverable.
You also need to retain all proof relating to your attempts at recovering the debt.
Understand your deductibles
As a business owner, it’s possible that you will have some mixed-use expenses, so it’s important that you keep track of all your deductibles.
While your business expenses are likely to be clearly reported through your accounts, anything that is mixed-use, being both business and private use, could also be applicable and provide you with additional deductions.
For example, if you have used your personal vehicle for commercial purposes or your phone is both your personal and business contact number, you may deduct the business component.
In this instance you will need to have a log book or diary as well as any receipts that indicate the costs involved.
“Keeping your financial records up to date — invoices, expenses, asset records, bank statements — is a critical part of effective business accounting.”
Bring forward expenses
Another strategy to help reduce this year’s tax obligations is to bring forward some expenses.
If you have invoices due in July or August, you could consider processing these payments before 30 June to help lower your taxable income.
If your cash flow supports purchasing new equipment or a company vehicle, this would also be beneficial as you could access the temporary full expensing measures.
These measures were included in the October 2020 Federal Budget and are an extension to the instant asset write-off.
“Businesses with an aggregated turnover of less than $5 billion can immediately deduct the business portion of the cost of eligible new depreciating assets. The eligible new assets must be first held, and first used or installed ready for use for a taxable purpose, between 7.30pm AEDT on 6 October 2020 and 30 June 2022.”
Seek professional advice
We understand that EOFY business accounting can seem daunting. But you can alleviate the pressure by seeking professional service providers to help you.
The team at North Advisory is here to simplify the process of meeting your tax obligations this EOFY. If you’d like to find out more about how we can assist, please contact us today.
About the author
Cayle Petritsch - Director & Wealth Advisor
Cayle Petritsch, Director and Wealth Advisor, works with our existing clients who have recognised the importance of business owners making strategic financial choices not only for their company, but for their personal finances too.
Cayle saw a great opportunity to expand North Advisory’s services into SMSF/superannuation, personal wealth management, asset protection services and other crucial personal finance facets that business owners need to consider.
His approach to wealth management allows you to receive highly personalised wealth advice. Working closely with Marius, Cayle understands the unique needs of every client, from their lifestyle and business goals to their retirement plans.
Key Takeaways
EOFY Is a Critical Deadline
30 June is a key reporting date that impacts tax, compliance and financial planning for businesses.
Clean Records Make EOFY Easier
Up-to-date bookkeeping and reconciled accounts reduce stress and delays at EOFY.
Payroll and Super Must Be Accurate
Ensuring correct payroll reporting and superannuation payments helps avoid penalties and compliance issues.
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Frequently Asked Questions
What is EOFY business accounting?
EOFY (end of financial year) business accounting involves reviewing, finalising and preparing your business financial records for the year ending 30 June, ensuring everything is accurate and compliant before tax returns are lodged
Why is EOFY accounting important for businesses?
EOFY accounting helps businesses meet tax obligations, maximise eligible
What should businesses review before EOFY?
Common EOFY tasks include reconciling accounts, reviewing payroll and superannuation, checking asset registers, confirming debtors and creditors, and ensuring all income and expenses are correctly recorded.
Can EOFY accounting help reduce tax?
Yes. EOFY is a key time to review tax minimisation strategies, such as asset purchases, s
Should I use an accountant for EOFY accounting?
While some business owners manage parts of the process themselves, working with an accountant helps ensure compliance, accuracy and the best possible tax outcome.
What should I do now to get my business accounting ready for EOFY?
North Advisory recommends starting early by keeping your records up to date (including invoices, expenses, deductions, asset records and bank statements) so you don’t miss potential tax opportunities. They also suggest taking action before 30 June to reduce last-minute stress and help ensure you’re claiming everything you’re entitled to.
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4 weeks ago
Changed to this company in 2019 from former accountant and love their approach of organizing everything for me face to face with Xero set up plus being able to call as much as I need for set annual fee. They also picked up on something that was not done correctly by my former accountant and saved me $4k for this.
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Don’t hesitate to contact us if you’re ready to streamline your financial management with tailored solutions. Your business’s success is our primary focus. Fill in the contact form or call us to book an initial 30-minute chat.
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