If you’re a small or medium business operator nervously counting down to the end of the financial year (EOFY), MYOB encourages you to take action now to help yourself avoid last-minute paperwork blues.
With less than one month to go, the time to get organised starts… now! If you spent the final hours of last June tackling piles of paperwork, reconciling receipts and clocking up rushed conversations with your accountant or bookkeeper – there’s a better way to bring in the new financial year.
Don’t wait until ‘crunch time’
MYOB CEO Tim Reed says, “Managing a business can take up the majority of your waking hours. It’s tempting to delay the not so exciting aspects, such as bookkeeping, until crunch time. Lack of preparation is one of the key reasons why many business owners and their loved ones dread the end of financial year.
“A solution like MYOB LiveAccounts or AccountRight Live acts as a virtual assistant by automating many aspects of your financial management, such as automatically feeding your business bank transactions into your software. You can view your financial situation in-depth or at a glance, and reduce time spent on manual data entry. This means more time for growing the business and enjoying life outside work.”
Michael Bagshaw, owner of finance, consulting and wealth protection business Statewide Business, says, “It’s never too late to get a head start on paperwork as the new financial year approaches.
“It’s understandable that even some of the most practical tactics to beat the paperwork blues get lost in the daily grind, when business owners wear so many hats. However, if they’re put into action now it is still possible to start the new financial year with a firm foundation and move forward with confidence and clarity.”
Mr Bagshaw has prepared these eight tips to help businesses plan for a happier new financial year:
Know your tax and superannuation obligations. Prefer to be buddies with the ATO and your financial institution? Well, keep your GST, PAYG and staff superannuation obligations up-to-date. Tracking these obligations through accounting softwaresuch as MYOB AccountRight Live is pretty straightforward. Just as importantly, allocating payments correctly and keeping records up-to-date helps you maintain an accurate balance sheet.
Review your bookkeeping systems. A pile of confusing receipts, unfiled invoices and no system to manage them is not a good way to make a healthy business. Haven’t documented your bookkeeping procedures? Thankfully your accounting software contains a list of helpful steps to follow. Documented procedures are particularly beneficial if multiple people manage one role (such as admin or finance), and they reduce duplication and errors. The most important thing you can do is reconcile each account monthly in your balance sheet.
Start planning your tax. Your accountant should be all over this as soon as the March quarter passes. By late March/early April you will have the first nine months of business information at your fingertips, making it relatively easy to estimate what your tax situation will look like in the April to June quarter. Tax planning should be long-term - the decisions you make today may impact your business for years to come. For example, do you want a tax deduction on your superannuation contributions? Take action prior to June 30.
Be in the know about cash flow. Don’t have a cash flow update? Get one! Cash flow monitoring is critical to any business. So is monitoring it regularly – monthly as a minimum and daily at best. Many failed businesses show a profit but run out of cash. Why? They fail to manage costs or anticipate rising costs. An ideal way to ensure you achieve sound cash flow management is to use up to date accounting software.
See your business structure with a set of fresh eyes. This is another discussion to have with your accountant. It’s helpful to ask questions such as: a) Is my current structure right for me? b) How should I structure my business to protect my assets? c) How should I structure my business long-term? Start thinking about succession planning as early as you can too - the right structure can help simplify this process.
Update your business plan. Your business plan helps clarify what your business should and shouldn't be doing. It sets out how and why you run your business, and includes everything from how you promote and fund it through to who your ideal customer is. A plan will enable you to answer some or all of these questions: Is my business model sustainable? Should I be doing more online? How can I best combat my competitors? Can I better allocate my resources? What’s the smart way to increase the value of my business, long-term?
Review your business finances. Get your qualified finance broker or your lending institution to review your finances to ensure you are getting the best return on your investment. Pertinent questions include: a) Are my assets financed to match the life of the asset? Do I have adequate cash flow to service my loan(s)? What is my interest rate, and is there a better deal or a different type of loan available to lower my costs?
Review your personal insurances. Often it’s not until things go wrong that business owners discover their personal insurances, such as life insurance, income protection and trauma insurance, are out of date or, at worst, missing in action! Depending on your circumstances you may be eligible for tax deductions. A discussion with your insurance broker and/or your accountant will help, as will taking time to compare deals online.
Visit http://myob.com.au/EOFY for a summary of major tax changes, helpful tips, resources and more.
For further comment or other information please contact:
MYOB Public Relations Consultant
P: 02 9089 9071
M: 0449 169 997
Haystac Public Affairs
P: 02 8094 7779
M: 0409 919 508
About MYOB Australia
Established in 1991, MYOB is Australia's largest business management solutions provider. It makes life easier for approx. 1.2 million businesses across Australia and New Zealand, by simplifying accounting, payroll, tax, practice management, CRM, websites, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and now spends more than AU$30 million annually on research and development. In 2013, MYOB expanded its offerings with the acquisition of accounting solutions provider BankLink. For more information, visit myob.com.au.