The End of Financial Year (EOFY) is almost here. This can be a stressful time for business owners, so we sat down with Boyce Chartered Accountants to get their insights on how to prepare, and things for watch out for in the coming financial year.
First and foremost, back up all of your records. You don’t want to lose all of the diligent work you’ve been doing throughout the year, and forward a copy to your accountant for safe-keeping.
If accounting on an accrual basis, ensure that all receivable and payables have been correctly accounted for before EOFY.
Make sure that expenses on credit cards and other accounts have been picked up so that tax-deductable expenditure isn’t over looked and that unpresented cheques (up to and including 30 June) are included in your June bank reconciliation.
Consider whether or not any changes to business structure should be considered (for flexibility, tax planning, succession planning, or other reasons).
A new financial year is the logical time to do this so that taxpayers don’t have to worry about the additional compliance requirements associated with 2 different entities operating in the one financial year.
You might also consider whether or not you could be doing something with superannuation and speaking with your advisers about whether or not there are opportunities that are suitable to your circumstances.
Your accounting system
Like a change of business structure, a change of accounting system is best considered at the change of a financial year.
Consider whether or not your existing system is meeting your needs, and if not what other options might be available.
There are some new developments with some software companies such as paddock and livestock recording that can link in with financial packages.
Make sure that everything is in order for EOFY reporting for wages (including superannuation, PAYG withholding, workers compensation and payroll tax if applicable), June Business Activity Statement (BAS), and general financial year close off.
Ensure that all of your records are in order for your accountant, including documentation for asset purchases (including any equipment finance, contracts/settlement statements for property purchases, etc).
Be prepared with a reconciliation of your livestock numbers, fodder on hand and other assets that your accountant will be wanting.
EOFY is also a good time to consider whether or not there are strategic opportunities for your business and to set some goals for the future.
This could include some of the big picture items such as succession and estate planning, purchase of another property, evaluating your mix of enterprises, considering property improvements, etc.
The 2019 Federal Budget may also change how your tax return will look in 2020.
The Morrison Government increased the primary producer luxury car tax refunds on vehicles purchased after 1 July 2019. Eligible primary producers will be able to apply for a refund of luxury car tax of up to 10,000.
Additional resources for drought assistance was also announced in the Budget and an Agriculture Stewardship Package will come in effect next financial year.