A Guide For Small Business
Introduction
Welcome to your comprehensive guide to preparing for the End of Financial Year (EOFY). This time of year can be a flurry of activity and, if used wisely, an opportunity to set your small business on a path of financial efficiency and growth.
This guide is designed with small business owners in mind, offering practical advice, essential checklists, and innovative strategies not just to survive but to thrive through the EOFY and beyond.
In these pages, you'll find insights into:
The Importance of Forward Planning: Laying the groundwork for what’s to come.
Assessing Your Financial Goals: Helping align your business objectives with your fiscal responsibilities.
Maximising Your Deductions: Leveraging every opportunity to reduce your taxable income legitimately.
Reviewing Your Business Structure: Taking advantage of the EOFY as the perfect opportunity to make potential changes.
Planning For 2024/25: Preparing for success in the upcoming financial year.
Managing your business finances doesn’t have to be burdensome. With the right tools and knowledge, it can be a powerful opportunity to solidify and grow your business.
The Importance of Forward Planning
Part One
Forward planning is not just a good practice—it’s essential for the health and growth of small businesses. It sets the stage for maximizing deductions, ensuring compliance, understanding the true financial health of your business, optimizing cash flow, and achieving peace of mind.
Staying Compliant: The web of tax laws and regulations demands adherence to avoid penalties and legal entanglements. Planning ahead empowers businesses to organize financial records, accurately report all income and expenses, and file the necessary tax returns within deadlines.
Understanding Financial Health: Conducting a comprehensive review of financial statements provides insights into strengths and weaknesses, guiding strategic planning and realistic goal-setting.
Optimizing Cash Flow: Effective planning can identify ways to streamline operations, reduce unnecessary expenses, and enhance revenue generation.
Achieving Peace of Mind: Starting the process well in advance reduces errors and allows for more thoughtful decision-making.
Assessing Your Financial Goals
Part Two
A clear understanding and assessment of financial goals sets the roadmap for your EOFY planning. Consider the following:
What Are Your Long-Term Objectives?: Define your goals—whether increasing profitability, expanding operations, reducing debt, or setting aside funds for retirement.
Managing Risk: Evaluate the risks tied to various EOFY planning approaches and ensure they align with your business’s financial stability.
Adapting to Change: Revisit and adjust your goals to keep your EOFY strategy relevant and effective amidst evolving business landscapes.
Maximising Your Deductions
Part Three
Understanding the criteria for legitimate business deductions is key to reducing your tax liability. Eligible expenses must:
Have a direct connection to income.
Be business-related and not personal.
Be supported with proper documentation.
Examples of deductible expenses include motor vehicle expenses, business travel costs, workers’ wages and super contributions, and more. Make use of the Instant Asset Write-Off to claim deductions on eligible assets up to $20,000 acquired between July 1, 2023, and June 30, 2024.
Reviewing Your Business Structure
Part Four
EOFY is the ideal time to reassess your business structure. Consider:
Allowing Enough Time: Transitioning to a new structure demands careful planning.
Client Communication: Keep clients informed about any anticipated changes.
A Fresh Start: Aligning changes with the new fiscal year simplifies reporting and fosters growth.
Planning for 2024/25
Part Five
Effective preparation for the next financial year involves:
Developing a Budget: Create a 12-month budget broken down monthly.
Understanding Costs: Review major expenses and assess cost-efficiency.
Setting Realistic Targets: Anticipate growth or stability and adjust goals accordingly.
Preparing for Irregular Payments: Account for quarterly BAS, tax obligations, and emergencies.
Reviewing and Iterating: Regular evaluations ensure your plans remain dynamic and responsive.
Raven Management info@ravenmanagement.com.au
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