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Small businesses are being urged to get their books in order now to avoid the annual end of financial year (EOFY) rush, with requests for tax accountants set to peak on 25 June according to data from Oneflare, the online marketplace changing the way Australians connect with trade and service experts.
Adam Dong, Oneflare’s CEO and Co-Founder, said that a staggering number of people and businesses are leaving it until the last minute to get financial guidance for tax time.
“Although many businesses work with bookkeepers or accountants on a monthly basis, it is clear there’s still a strong need for individuals to connect with experts who can support them with tight turnarounds on tax lodgements. Last year, 94 per cent of requests for tax support throughout the May and June period were lodged just five days before the official EOFY.
Based on requests for financial service experts in the months leading up to the EOFY deadline, the research revealed almost a 200 percent increase in job postings for tax accountants between 2014 and 2015, with 2016 on the way to eclipsing this growth.
Despite the demand however, the median cost of hiring a tax accountant decreased by over 20 per cent, costing an average of $110 in 2015 compared with $139 in the previous year.
“Oneflare is all about helping Australians get things done, so we expect to see a spike in the coming weeks as people look to get organised before 30 June. And while our network of brilliant number crunchers and advisers will always be there to help, now is definitely a good time to get started and beat the bottle-neck rush.”
To help minimise the stress for small businesses in managing tax return submissions, Oneflare accountant, Lauren Brown of Hillier’s Advisors in NSW, has these top tips.
#1. Start early (now!)
Get your documents together as early as possible to help minimise stress and ensure you lodge correct statements. As you go, confirm your business records are in line with current legislation. Businesses should always plan ahead and retain copies of previous years’ records. For some businesses, this involves manually collecting an inventory of receipts, expense records, invoices or employee details to review the company’s spend. If you can accurately estimate your profit you can help minimise your tax with some smart end of year planning.
#2. Match your accounts
Reconcile all accounts, including investment accounts, unpaid or outstanding debts and any leases. Start by chasing up outstanding payments, pending invoices or unpaid refunds. When all payments are up to date, match your receipts to your bank transactions to ensure all statements are consistent with your own records. This will help you spot any discrepancies or duplicate transactions.
Any payment summaries should be sent to employees well before July. While reconciling your accounts, use this chance to update employees’ current financial details and superannuation payments, also checking any termination dates and leave entitlements.
#3. Buy what you need, scrap what you don’t
Some business owners use this opportunity to pre-purchase service and supplies to claim a deduction but fall for the trap of spending for unnecessary items, simply for a tax deduction. Any spending for important business purposes can be used to claim a deduction.
#4. Claim the right deductions
Having accurate and detailed records will help you make the right deductions and concessions for your business. You can claim expenses related to the running of your business – mostly for day-to-day costs or for expenses that depreciate over time but are used to improve the structure of your business. Check the ATO for more information on what expenses can be claimed.
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