4 things startup founders are doing to prepare for EOFY
EOFY is coming, and if you’re a small business owner or a startup founder you’re probably starting to think about the best way to prepare your business for it.
Over the last few weeks, I approached several founders of consultancy firms, software development companies and fintech startups and asked them what they were doing to put their businesses in the best possible position for the EOFY.
During these discussions, I discovered that they all had some great advice for companies preparing for the EOFY, and I have narrowed their advice down to four key points.
1. Timing expenses, and taking advantage of tax incentives
When speaking to software companies, the advice was geared towards the organisation of business costs and capital raises.
Daisee, a rapidly growing Australian startup who are building Artificial Intelligence applications for businesses, have put a strong emphasis on the timing of investment rounds and business expenses.
Richard Kimber, founder and CEO of Daisee, believes that the planning of cashflow and utilising tax incentives is of utmost importance when preparing for the EOFY.
“For any business undergoing rapid growth, the main focus should be in the timing of expenses; and the subsequent planning of cash flow around the tax year end,” he said.
“We’re still heavily focused on R&D and software development; so documenting our investment and getting all the paperwork ready is a key task.”
Richard also suggested taking advantage of tax incentives that make your business more attractive for investors.
“Another consideration has been the timing of fund raising rounds to optimise the situation for our investors. ESIC status can provide advantages for sophisticated high net worth investors.”
2. Speak to the pros
Another great piece of advice was given by Tapha Faye, managing director of E-Pocket.
E-Pocket, which is a fintech platform that bridges the gap between banking and the financial industry, has put a focus on emphasising the importance of reaching out to the experts when preparing for the EOFY.
“As a new company you face a lot of uncertainties in terms of compliance, rights and responsibilities,” Faye told The Pulse.
“We’ve been trying to gather different experts in different fields to help us with guidance and how to approach our EOFY preparations. The right guidance is crucial in this area.”
3. Educate yourself
They say experience brings wisdom, but knowledge brings power.
That also applies to companies looking to get the best out of EOFY, according to Pelikin co-founder Sam Brown.
Pelikin is building a mobile-only banking alternative for Australians that they can use both locally and while abroad to send, spend and track money securely.
He said it was vital for founders and small business owners to educate themselves on tax basics.
“Getting help is one thing, but I think it’s important to educate yourself,” explained Brown.
“Giving yourself a base understanding of bookkeeping procedures and software will mean you don’t enter into tax time blind and can help your accountants prepare faster, which ultimately helps keep the cost down.”
4. Plan beyond EOFY
When it came to consultancy firms, ADI Immigration is a great example of a company that takes their EOFY planning seriously.
ADI is an Australian small business that provides consultancy and assistance to individuals and families who are looking to migrate to Australia from various countries all over the globe.
Eli Bekker, Principal at ADI, sees planning beyond the EOFY as a sure way to transition through the end of the tax year smoothly.
“As hard as it may be, it’s very important to have your next six months planned out in terms of cash flow and current liabilities,” he told The Pulse.
We try and work through our tax return keeping in mind what is payable in the short term against what our projected income will be.
“We’re now at a point where we receive a weekly reconciliation from our accountant and it has saved us massive time and energy in the last-minute scramble for information.”