Spare cash sitting around at the end of the financial year. For some, it might seem like an impossible dream. But the reality is as your business matures and you get into that positive cash flow cycle, this actually does happen.
When it does – and I promise, it really can – it’s time to use this spare cash to work for you and your business. Here are three ways you can:
Instant asset write-off
This is a no brainer. If you are a business with turnover less than $10Mil, then you can make that important purchase before June 30th and claim the entire purchase price up to $30,000 as an income tax deduction. You can also claim any GST input credit.
You can find out more about this from the ATO website, or check in with your financial adviser
Pay off credit card debt
Credit card debt is one of the biggest traps for small businesses. Getting rid of non-tax deductible or non-purposeful debt is absolutely one of the best ways to use that spare cash. According to Finders.com 2018 State of the Market Credit Card Report, there are 15,973,165 credit cards in Australia as of November 2018, accruing interest of $33 billion annually.
That’s a whole lot of debt. So if you can whack that spare coin into your debt payments, pay down debt and cut the card up. That way, when you have the impulse urge to purchase that new pair of heels that you can’t live without, you have a protection mechanism in place.
Top up your superannuation
The harsh truth is that many of us small business owners get caught up in the day-to-day reality of running our business. Next thing you know, your retirement plan – or lack of one – can creep up pretty fast.
It’s worth taking note of the fact that you can contribute up to $25,000 per year, per person, into your nominated superannuation fund. Over 20 years, that’s a cool half a million. Check in with your QuickBooks ProAdvisor for more details, or take a look at the ATO site.
And as a final tip, if you have been really working hard in your business, feeling tired and just haven’t had any time for yourself, or maybe even thinking it’s time to throw the towel in and shut up shop then take a holiday. This is one of the best pieces of advice I’ve ever been given in business. Taking time out gives you the opportunity to rest, recharge and see things clearly. Then make better decisions.
The most important thing is to spend that spare coin in a way that will really work for you.