Preparing for EOFY
June 2015
What should you be doing ahead of the end of financial year?
The end of financial year is a great opportunity to clear the way for a new financial year, particularly in making sure that your business is in the best position it can be tax-wise.
Review - and boost - your cash flow
Cash flow is the lifeblood of any business and it's a vital health check for a sustainable business. Review your current position with your accountant early so that you can work out whether your cash flow needs a boost or if you've got the cash flow to bring forward any expenses before the end of the financial year.
Move to the cloud for 2016
If you've been thinking about moving your accounts to the cloud, June is a great time to get everything in order for go-live on July 1.
Pre-pay your expenses
One of the key strategies for end of financial year is to pre-pay some expenses. One area to look at is whether you're currently paying month-to-month for subscription services that you may instead be able to pre-pay for the year to come.
Ensure your super contributions have been paid
Make sure that you've paid any additional superannuation contributions before 30 June to ensure that it is tax deductible prior to 30 June..
Write off bad debts
If you're still chasing invoices from last financial year, now is the time to write them off, as bad debts are tax deductible and can be used to offset taxable income.
Ensure your accounts are up-to-date and any balances owing paid
EOFY is the right time to make sure that any compliance-related work is up-to-date, such as outstanding BAS lodgements, super guarantee contributions and payroll.
Stocktake and inventory
If your business carries stock, then you should review inventory ahead of 30 June 2015 and adjust your accounts accordingly. Identify any obsolete stock that can be written off.
Check your asset register
If your business has plant and equipment, then check that any changes are noted in your asset register, such as descriptions, location, quantity, whether it has been disposed of, new assets in the business and damaged or obsolete plant and equipment. This is important for a range of reasons but particularly for CGT.
A simple Checklist for EOFY
- Writing off damaged or obsolete stock;
- Writing off bad debts;
- Scrapping any out-of-date or obsolete plant and writing of off your asset register;
- Making loan repayments to satisfy Division 7A loan agreement;
- Finalising any inter-entity management charges;
- Review your deductions; and
- Take advantage of timing benefits and permanent savings.
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Disclaimer
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
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