Here are some tips to consider for yourselves and your businesses as the new financial year kicks off
Peak Strategies senior chartered accountant Victoria Le gives some top tips to consider for the new financial year
Some employers allow salary packaging to their employees. What this means is you can salary sacrifice a part of your salary/wages (before tax) in return that the employer provides a benefit of similar value.
An effective salary sacrifice arrangement means that you pay income tax on the reduced salary/wages which provides more after-tax dollars to you. So why not talk to your employer and see if you are eligible to get the ball rolling to benefit for the whole financial year.
Now that a financial year is complete, why not see your accountant early to get your financial statements and tax returns completed? The benefits of getting your compliance completed early are:
· Help with cash flow – If you are lucky, you might get a boost from a refund! Alternatively, if you have a tax bill, you can manage how you are going to make payment before the due date.
· Have it completed while you have everything fresh in your mind. You may forget what you have done during the previous financial year as time goes by so you might not be in your best tax effective position leaving it later.
· If you are one of those people who only reflect on your financial position once a year, you can be pro-active and get in early and talk to your accountant once your compliance is completed. You can go through and review what changes you can make throughout the year to help minimise your tax instead of doing it last minute in June.
· Keep the ATO off your back by meeting your tax obligations on time.
Whenever you need to make life changing decisions, it is always worth the visit to your accountant. Whether it is from plans to retire, buying/selling an asset/business or even finding ways to minimise your tax liabilities, your accountant can be a lifesaver to ensure the timing of these events will give you the best tax outcome.
Tax legislation can be very complicated and needs to be interpreted and adhered to correctly so if there is going to be an event out of the ordinary for the year, have a chat to your accountant to help you plan the details of the event.
Spring Clean Your Finances
Now is a good time to review your finances and see if you need to approach the right advisor to help you out with your financial obligations or goals. This might include your accountant, lawyer, superannuation specialist, financial planner, bank relationship manager, etc. These professionals can help review and set you on the right path to good financial health.
End of Year Payroll Processing
It is important to note for business owners that there are some big changes being made to year end processing as follows:
· If you need to prepare year end payroll summaries for your employees, please make sure you do this before you rollover your payroll year to do the first pay run for the new financial year. (Note: Payment summaries are to be sent to employees before 14 July following the end of the financial year. Annual PAYG (Pay as You Go) Payment Summary Statement is to be reported to the ATO before 14 August following the end of the financial year – Penalties apply for late lodgement).
· Review and update your employee wage rates where necessary and ensure they are in line with Fair Work.
· Single Touch Payroll comes into play from 1 July 2018 for business owners who had 20+ employers in their head count from 1 April 2018.
· Single Touch Payroll will apply for all businesses from 1 July 2019 so make sure you have time to set up your accounting software so you are compliant.
Budgets are a terrific way to help manage your income and expenses and create healthy margins. You should review and reflect on the prior year and see whether you can find a way to save money. For businesses, you can look at the following:
· Look for any opportunities to cut back on any expenses.
· Speak to your supplier and see whether you can negotiate on costs.
· Look at your credit terms and policies. This will be useful in regard to cash flow.
· Current market trends and what opportunities you can undertake or how you can mitigate any damages your business could suffer from.
Whilst we want to improve our position, you need to make sure what you’re budgeting is also achievable and realistic with current performance and industry trends.
Business 3-Year Plan
If you have a business, do you know where you are heading? If not, start planning now as there are so many areas of the business you need review!
Forward thinking allows you to review your business on what is working for you or not and what goals you want to achieve. It also helps provide guidelines on how you will achieve your goals and provide more clarity to your business decisions.
If you already have a 3-year business plan in place, make sure you review last’s years performance and see if you are ticking boxes to where you are heading. It is also a good time to make any changes to your plans if circumstances change.
Review Your Systems and Procedures
A business should always have systems and procedures in place to ensure the business runs smoothly, however when was the last time you reviewed yours? Do you even have one in place? Owners often find themselves exhausted because they are always busy trying to do everything but there are never enough hours in a day.
To work smarter, here are a few questions you can ask yourselves:
· Can you delegate any tasks to other people to perform? Sometimes you just need to let go of the little tasks so that you can look at the bigger picture as an owner. You will be surprised what other people are capable of and what a good job they do as they have more time to focus on these tasks.
· Are you recording your financial information efficiently and accurately? Failure to do so could result in poor business decisions being made.
· Are there any components of your business that can be automated? It might be worth looking to see if the technology is keeping up with your business as some automated tasks will allow more efficiencies and lower chances of human error.
For more information on these topics, contact Peak Strategies pharmacy specialist accountants