Get your business feeling EOFY fit with these five steps

The end of financial year can have many business owners crying over the year’s worth of paperwork, but Leanne Berry, Community Relations Manager – Partners at MYOB, has five top tips to help you and your business feel EOFY fit.

As our calendars tick over into June and the end of financial year (EOFY) looms large, how do you feel? Stressed about getting your finances in order? Or organised and ready for the 30 June compliance?

The past few years have had a significant impact on the way small and medium businesses operate, with SMEs under immense pressure to adapt to changing external circumstances and for some, a battle to even stay afloat.

And the challenges are ongoing, with the latest MYOB Business Monitor showing that 17 per cent of small to medium sized business owners believe COVID-19 related impacts on their business will last for another 6-12 months.

Five tips to help you feel EOFY fit

Here are five tips to help you prepare for the end of financial year and get on top of tax time.

Calculator, cash and tax forms

1. This isn’t your usual EOFY

Pressure to stay afloat and hikes in operational costs mean this isn’t your typical EOFY.

Some businesses might have been accessing personal finances to keep things afloat, so now is the time to ensure your business and personal expenses are in the right place and ideally in separate accounts. Having separate accounts for your GST tax and super is also best practice to ensure that you can meet all your liability obligations as they occur.

You might find that this year’s data looks quite different due to COVID-19 related impacts, so don’t get too hung up on comparing your statements with previous years.

2. Have your data to hand

Are you still relying on paper-based receipts and working from shoeboxes?

Digitisation with a business management platform is the ideal way to keep track all of your documentation, and one in three business owners say digital tools have helped them get paid faster. Remember, the ATO requires you to keep all documents for five years after your tax return, and digitising can help with this. If you have employees, Fair Work requires that your documentation be held for seven years.

It’s helpful to create a ‘financial year folder’ where you can drop in anything relevant to EOFY as you come across it – rather than searching through everything once the end of June arrives. Set up a folder for the new financial year at the same time, so you start July on the right foot. What should you file in these folders? Bank Statements, lease agreements, finance documents, asset sales, anything that you feel your accountant or advisor will need for end of year compliance activity.

Now is also a good time to look at payroll data, and if you have a deferral, prepare to finalise Single Touch Payroll 1 and transition to Single Touch Payroll 2 after 1 July.

woman at desk calculating receipts and invoices

3. Get ready to reconcile

Reconciliation is an area most small businesses owners don’t prioritise throughout the year, so now is the time to reconcile credit cards, bank accounts and balance sheet items, as this will reduce the associated compliance costs at EOFY.

A business management platform will often allow you to import bank transactions, so that your bank feeds can help automate reconciling your income and expenses, and your profit and loss.

Conducting a stock take as close as possible to 30 June is also a great way to make sure your stock balances are accurate.

4. Join the digital side

Digital solutions are designed to help small businesses save time, become more efficient and eliminate manual processes. There’s a definite digital trend, with 67 per cent of small businesses using online platforms to assist with tax and BAS lodgements.

So, how could digital solutions such as online timesheets and direct debits help streamline your workflow and cash flow? Look at utilising solutions that offer deep integrations with software you currently rely on. When they work seamlessly together digital tools can help save you time and allow you to focus on the core business.

Speak to your accountant about how they could use software to directly interact with your data too, improving EOFY efficiencies.

5. Reflect and reframe

Along with getting your financial ducks in a row, EOFY is also a timely reminder to reflect on the past 12 months in your business. What went well? What didn’t? Are you working in the most efficient manner? What could you do differently in the year ahead?

Have you been impacted by increasing costs such as freight and fuel prices? If so, the new financial year is a good time to review your outgoings and pricing. Remember to clearly communicate any changes to your customers.

Make it count

Whatever position you find yourself in right now, there’s still time to get on top of your finances so you can sail smoothly into EOFY. With the right tools and processes, you’ll have all your data to hand, and full transparency on your business’ position.

Make 2021/22 the year you take charge of EOFY. It might be easier than you think.

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