Forward planning is key to a successful and stress-free financial year-end
While one third of SMEs are making inroads into their financial reporting obligations by getting organised early, those who leave their EOFY obligations to the last minute will likely sacrifice social commitments, weekends and evenings.
The latest research by Australia’s leading accounting software provider MYOB revealed nearly one third of SMEs had worked weekends to meet their EOFY obligations in the past (31%). 20% worked beyond midnight and 14% turned down an invitation to catch up with friends. 10% had been unable to take planned holidays and 7% had missed an important family event.
Almost one third of SMEs start preparing their EOFY paperwork at least one month before June 30 (31%), and a further 23% get moving in the weeks prior to June 30. Conversely, 18% wait until up to a month after EOFY to begin preparing their paperwork, and a further 21% don’t start until one month or more after the financial year ends.
MYOB CEO Tim Reed recommends business operators avoid crunch time by starting to prepare now and spending time with their accountant or bookkeeper to bring in a happier new financial year.
"It's tempting to put the books on the backburner, however lack of preparation is often the reason why June 30 fills business owners and their loved ones with dread. 64% of SMEs use an accountant and 13% use a bookkeeper to help them with EOFY compliance. With an accountant or bookkeeper as a trusted business advisor, business owners can draw a line under the previous year, and pinpoint their business pain points and key drivers for success.
"It’s easier to stay on top of reporting and compliance with a reputable cloud accounting solution like MYOB Essentials Accounting or AccountRight. They act like a virtual assistant by automating many aspects, reducing time wasted on manual data entry.
"A popular feature of our cloud accounting solutions is the industry-leading bank feeds by MYOB BankLink, where bank transactions are automatically imported and coded into the software. This daily feed means keeping up to date with your accounts now takes a lot less time than in days gone by.
"Paperwork that’s well organised means fewer ongoing tax time tangles for you, your employees and your loved ones. It frees up your time, so you can focus on growing your business and doing what you love."
MYOB has prepared these top tips to help businesses prepare for EOFY:
1. Meet with your business advisor before the financial year ends.
Failing to plan is planning to fail, as they say. Potentially save time and dollars by meeting with your business advisor before the financial year finishes. The benefit of hindsight is a wonderful thing, but it doesn’t enable your advisor to supply valuable advice once the financial year has finished. Ensure your info is up to date so that your balance sheet is accurate and reflects your business’s true financial position.
2. Get organised.
A pile of confusing receipts, unfiled invoices and no system to manage them is not the best way to run a healthy business. Set up a bookkeeping system and document your process. Your accounting software contains helpful steps to follow. And remember: maintaining and updating your business records regularly will help alleviate the pressure of EOFY. Consider blocking out time in your diary for paperwork each week or fortnight.
3. Familiarise yourself with key compliance changes.
If you operate a business in the building and construction sector, are your systems prepared for your first Taxable Payments Annual Report of contractor payments before 21 July 2014? Are you familiar with SuperStream? Check outhttp://myob.com.au/taxtime for everything you need to know about EOFY compliance changes.
4. Plan your tax.
Your business advisor can help you estimate what your tax situation will look like for the April to June quarter before it finishes. 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? Or are there any potential deductions, write-offs and rebates that you can take advantage of? Take action prior to June 30.
5. Adopt technology to drive productivity.
Technology can transform the way we communicate, capture and store information. Using cloud accounting solutions such as MYOB AccountRight and Essentials Accounting can help you organise and track your financials, build a clearer picture of your financial circumstances, and helps keep you compliant. Review your accounting software to determine if it’s the right solution for your current position - whether moving to cloud accounting or using add-on solutions.
6. Revisit your business plan.
EOFY shouldn't be all facts, stats, dollar signs and reports. Now is an ideal time to either write a business plan or reassess the one you have to ensure you’re on the right path for this financial year. Strategic planning is essential to maintain your business’s ability to stay healthy, adapt and grow over time. Having a passion for what you’re doing is very important – it will carry you through the late nights and long weekends – but it’s not a substitute for a solid business plan.
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About the MYOB Business Monitor
Established in 2004, the MYOB Business Monitor is a national survey of small and medium business owners and managers, commissioned to independent market research firm Colmar Brunton. The most recent study ran in July and August 2013, surveying 1,022 operators from sole traders to mid-sized companies, representing the major industry sectors. The Monitor researches business performance and attitudes around areas such as profitability, cash flow, pipeline work, technology usage and government. Note: the weighting of MYOB client and non-client respondents is reflective of overall market proportions. This media release details the survey findings for the 300 importers and exporters in the respondent pool.
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.