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Tax time checklist for SMEs

Tax time can be overwhelming for small business owners however, being organised and on top of what needs to be done to finalise the financial year will help make the process smoother. We’ve put together some tips on how to prepare from a tax perspective and some things your business can do to get planning for the year ahead.

It’s time to reconcile

Ensure your business bank account/s are reconciled so you have a clear picture of what happened this financial year and that they line up with your incomings and outgoings. The main thing your accountant will need will be your monthly reports from your bookkeeper so if you haven’t had the chance to collate, you will need to go back through bank statements for the 2021/22 financial year, and locate the receipts and invoices accordingly. Throughout this process, it is a good opportunity to identify any unpaid invoices, Business Activity Statements (BAS; these are due quarterly to the ATO) as well as any employee obligations you need to finalise.

Depending on your business structure, you are legally required to keep your tax records for a minimum of five years and if operating under a business structure, the requirement is seven years. These documents are anything that supports the contents of your tax returns such as receipts, calculations, nominations, proof of income and other relevant records. 

Finalise all employee obligations

If you have staff, it’s important to speak to your accountant and put the time aside to finalise the data for your Single Touch Payroll (STP) for the financial year. This is important so your employees can access their end-of-year income statements for their own individual tax returns so you must ensure the correct payroll numbers have been reported through your accounts. 

If you are also looking to claim super as a tax deduction for your business, you must pay your employee’s super from your business bank account prior to 30 June (EOFY) even though it’s not due until 28 July.

Review your finances and cashflow

The end of the financial year is the perfect time to sit down with your accountant (or whoever may oversee your business’ finances) to review whether you hit your targets and met budget over the past financial year. 

There could be some tax advantages to prepaying some of your 2021-22 expenses in the current financial year or even shifting some invoice payments to the next financial year, depending on your business’s situation. Always check with your accountant to make sure this is a strategy you could adopt for your business.

Something you should also get in the habit of doing is reviewing your business expenses which includes things such as insurance, your suppliers, products you’re offering and also your EFTPOS provider. The way you collect payments could have significant cost and resource implications in other areas of your organisation, so we suggest ensuring payments aren’t actually costing your business. Smartpay has a Zero Cost EFTPOS solution that allows you to automatically pass on your transaction fees so you get to save on EFTPOS bill – putting the savings back into your business to help you plan for some extra cash flow for the year ahead!

Take control of next year’s planning

End of Financial Year (EOFY) is the best time to take control of planning and set goals for the forthcoming financial year to ensure your business is adapting. Your certified accountant can help you with tax planning strategies you might not have considered and can give you guidance based on your expected taxable income (assessable income for your business minus any allowable deductions) for this current financial year (2021-22). From there, you can forecast your likely taxable income for the next financial year (2022-23). You can also research government support available for SMEs: stay up to date with tax incentives, rebates and deductions available to you and your industry.

All in all, June can be a busy month in the lead up to the end of the financial year but in order to fully prepare your business for tax time and the year ahead, speak with your accountant or financial advisor to execute and strategise.

Disclaimer: Smartpay does not provide tax, legal or accounting advice. This article has been prepared for informational / educational purposes only and does not constitute advice nor should be relied on solely for tax, legal, or accounting purposes. Please consult your tax / financial advisor or accountant for advice.

Want to know more about surcharging?

If you’re keen to learn more about how surcharging on EFTPOS works, or what you could save, find out more about SmartCharge. To talk about how surcharging could work for your business get in touch with the team at Smartpay.