As the 30 June draws nearer, businesses must gear up to meet their tax obligations efficiently and accurately.??
This period can be hectic, but with careful preparation, you can ensure compliance with Australian Taxation Office (ATO) requirements and optimise your financial outcomes.?
Here’s a comprehensive checklist to help your business prepare for EOFY tax obligations, including lodging Business Activity Statements (BAS), reconciling accounts, and more.
1. Review and Reconcile Accounts
Task: Reconcile Bank Statements
- Ensure all transactions are recorded: Match your bank statements with your accounting records to ensure every transaction is accounted for.
- Identify discrepancies: Investigate and resolve any discrepancies between your bank records and accounting software.
Task: Review Accounts Receivable and Payable
- Follow up on outstanding invoices: Contact clients to settle any overdue invoices.
- Settle outstanding bills: Pay any outstanding supplier invoices to maintain good relationships and accurate records.
2. Update Financial Records
Task: Inventory Stocktake
- Conduct a physical inventory count: Verify your stock levels and identify any discrepancies between physical stock and inventory records.
- Adjust inventory records: Update your accounting software to reflect accurate stock levels.
Task: Fixed Assets Review
- Update asset register: Ensure all fixed assets are recorded accurately, including any purchases or disposals during the year.
- Depreciate assets: Calculate depreciation for all fixed assets to reflect their current value in your financial statements.
3. BAS and GST Lodgement
Task: Prepare and Lodge BAS
- Accurate GST reporting: Ensure all GST collected and paid is accurately recorded in your BAS.
- Claim eligible GST credits: Verify that all eligible GST credits are claimed correctly to maximise your tax benefits.
- Lodge on time: Ensure your BAS is lodged by the due date to avoid penalties.
4. Payroll and Superannuation Compliance
Task: Finalise Payroll
- Review payroll records: Ensure all employee wages, salaries, and entitlements are accurately recorded.
- Issue PAYG summaries: Provide Pay As You Go (PAYG) payment summaries to all employees and submit the annual PAYG report to the ATO.
Task: Superannuation Contributions
- Ensure timely payments: Make sure all superannuation contributions are paid by the quarterly due dates.
- Reconcile super accounts: Verify that superannuation payments match the amounts recorded in your payroll system.
5. Review and Claim Deductions
Task: Identify Deductible Expenses
- Review business expenses: Identify all deductible business expenses incurred during the year, such as office supplies, travel, and marketing costs.
- Prepay expenses: Consider prepaying expenses for the next financial year to claim deductions this year, if cash flow permits.
Task: Claim Depreciation
- Review asset purchases: Ensure all eligible assets are depreciated according to ATO guidelines.
- Instant asset write-off: Utilize the instant asset write-off for eligible asset purchases to reduce your taxable income.
6. Financial Statements Preparation
Task: Prepare Financial Statements
- Profit and loss statement: Prepare a comprehensive profit and loss statement to summarise your business income and expenses.
- Balance sheet: Compile a balance sheet detailing your business assets, liabilities, and equity.
- Cash flow statement: Prepare a cash flow statement to track the inflow and outflow of cash.
7. Plan for the New Financial Year
Task: Budget and Forecasting
- Create a budget: Develop a budget for the upcoming financial year to guide your business finances.
- Set financial goals: Establish clear financial goals and key performance indicators (KPIs) to track your progress.
Task: Review Business Structure
- Evaluate business structure: Assess if your current business structure is still the most tax-efficient and appropriate for your operations.
- Consult a tax professional: Seek advice from a tax advisor or accountant to optimize your business structure and tax strategy.
8. Ensure Compliance with ATO Requirements
Task: Review Tax Compliance
- Stay updated: Keep abreast of any changes in tax laws and regulations that might impact your business.
- Maintain records: Ensure all financial records are kept for the required period (usually five years) and are easily accessible.
Task: Lodge Tax Return
- Accurate reporting: Ensure your tax return accurately reports all income, expenses, and deductions.
- Meet deadlines: Lodge your tax return by the due date to avoid penalties.
- Don’t Rush: Make sure that your tax return is completed correctly to avoid red flags for the ATO - a rush job may neglect to include some areas, particularly those that are usually pre-filled.
Preparing for EOFY tax obligations can be a complex process, but with a systematic approach and detailed checklist, you can ensure compliance and optimise your financial outcomes.?
Regularly reviewing and updating your financial records, reconciling accounts, lodging BAS statements on time, and claiming all eligible deductions are crucial steps.
Additionally, planning for the new financial year and consulting with a tax & business advisor can help you navigate the complexities of tax compliance and make informed financial decisions.
