Have you ticked all the boxes ahead of June 30?
Have you ticked all the boxes ahead of June 30?
IT’S hard to believe the end of another financial year is almost upon us.
Have you reviewed the year that was, making sure that all statutory payments are up to date, ensuring you’ve completed any transactions needing to be processed before the end of the financial year?
I don’t claim to be a tax guru, so please consider this article a prompt to have a quick chat with your accountant or tax adviser and confirm that everything you could or should do has been done.
There are many areas to consider.
Purchases
If you are considering buying a motor vehicle or piece of equipment, is it better to buy it this financial year and get the benefit of deducting the GST in this cycle? Don’t forget that, if using accrual accounting, the timing of the invoice can be independent of the timing of the actual cash flow.
Creditors
Are there creditors you should pay this year rather than next, or vice versa (depending on your individual tax planning and the level of revenue generated this year compared to that expected next year)?
Some of your customers have their own tax positions and it can be beneficial to chat with them in relation to the timing of payments in regard to the terms of payment achieved.
Super
Do you have superannuation contributions that need to be made for yourself and/or related parties? These will need to be processed within the appropriate timeframes. Don’t forget there are very stringent requirements in relation to the amount you can contribute. Failure to comply with these requirements can be very costly.
Loans
Are you considering fixing the rate on your loans and paying the interest 12 months in advance? If you are, this week would be the absolute last chance to consider this option before the cut-off dates. (Some banks will be pushed to even comply this close to the end of the financial year.)
One payment
Did you know you can buy a car or vehicle on finance and make a lump sum payment up front? There are clear guidelines that need to be adhered to but this is the last chance to do this this financial year.
Looking ahead
Have you started the process of completing the projections for next year in regard to performance of your business? Many owners are experiencing shrinking revenues and expanding costs and it is important to understand the impact that this will have on your business. Now is the time to prepare a projected profit and loss and cash flow to ensure you fully understand the implications to your operation.
Review
Now would also be a good time to start a review of your professional advisers. Do they simply process reports based on processing historical data or do they look forward? Have they been instrumental in targeting new revenue streams? Have the secured reductions in existing expenses? Have they assisted in reviewing how you do business and the many options that exist?
If they haven’t, then you owe it to yourself and your business to look around and speak with others who can. Speak with your peers or industry bodies and discover the movers and shakers that are taking your competitors to higher levels of productivity and profitability.
So as we approach the end of the financial year, remember how critical it is to consider all the business aspects of your operation. Take steps to make sure it is the best it can be and that you are prepared for any tough times that may lie ahead.
• Paul Rowe is managing director of The Business Squad.
