Getting SuperStream-ready ahead of EOFY
Many small business owners prioritise working on sales or business operations to financial paperwork. Often the bookkeeping is left to the evenings or weekends, or when something becomes urgent.
It’s understandable. After all, the money is made in sales and operations.
However, the end of financial year is approaching and getting organised will mean fewer piles of paperwork to deal with later.
SuperStream is coming — and with it may come a change in priorities for many small businesses. That’s because from 1 July 2016 even small employers will be required to report and pay superannuation electronically, which may cause a few headaches for some.
The move to an online system for reporting and payment is a big shift for businesses that aren’t using cloud-based accounting software. Some may even feel a cash-flow crunch because data regarding super obligations and super payments must be made the same day.
Now is the perfect time to get your accounting in order and address any cash-flow problems so you can pay your obligations on time.
Here are three steps you can take to reduce the risk of a SuperStream headache.
1. Get SuperStream in order
Action Plans are an excellent tool to help get important things done (and avoid them slipping off the radar). A SuperStream Action Plan could help you get sorted out by the 1 July deadline.
On your Action Plan, write down the steps that are needed to get SuperStream compliant, who is responsible for each step, and by when they must be completed.
A good starting point is to find out what SuperStream is all about. Ask your accountant for further information about how it affects your business. Compliance is straightforward with your online accounting software, but if you need to get expert help to set up for SuperStream now is the time to organise it.
Write the milestone actions on your Action Plan. Check weekly that the actions due have been completed.
2. Create a cash flow forecast
Poor cash flow can sometimes lead to struggles when Super payments are due. The introduction of SuperStream means increased focus on timely payment. If cash flow causes you headaches when it comes to paying Super, now might be a very good time to take a look at this aspect of business.
A cash-flow forecast is the starting point to better cash management and avoiding a cash flow crunch. Once you see how the cash is likely to come in and out, you can anticipate any cash shortfalls — and do something about them.
One very important thing to note is that your cash flow forecast should take account of GST, tax and Super payments when they are due. It’s all too easy to forget about them and then find yourself short of cash when it’s time to pay.
But what if you’re not sure how to prepare a cash flow forecast, or you know you’ll never get round to it? This is definitely something for your accountant. Most love to help with this kind of thing and can often come up with suggestions for how to improve your cash flow.
Also read: 6 tips for managing cash flow
3. Invoice immediately to improve cash flow
One final thing while we’re talking about cash flow: How are you at getting paid?
For non-retail businesses, one of the best ways to improve cash flow is to invoice immediately — as soon as a job is complete. The sooner you send an invoice, the sooner you will be paid. Even better is to make up-front payments standard practice in your business, if you can.
If you don’t already comply with the new Super requirements, now is the time to get this aspect of your business in order, and make sure you’ll be able to pay your Super obligations on time.