Let’s be honest, end of financial year is no one’s favourite time of year. With different reports to create and tasks to tick off, things can get stressful.
Hiring an experienced accountant to ease the load is one way to take the pressure off.
However, it’s important to come prepared with a list of everything you want to discuss, to ensure you make the most of your time with them.
To make your life a little easier, we asked Paris Kechayas of Alpha Accounting to list the most important things to discuss with your accountant at this time of year. With this information at hand, you’ll hopefully be able to reduce any back and forth with your accountant, and get back to running your business.
1. Bookkeeping systems
Your accountant is a great resource who can provide you with a lot of support in most of your business decision-making processes. So, it’s important not to waste that focused time on matters like routine bookkeeping.
If you haven’t already done so, ask them to help set you up with an accounting system. Cloud accounting software like Xero or Reckon automatically connects with your bank accounts and adds a whole host of automation to your bookkeeping processes. This will free you and your accountant up to discuss more strategic things.
2. Pricing models
Your initial business plan should provide for profitable trading, and your accountant should be able to help you fine tune your pricing and any break-even points that you’ve set up. This will help you generate turnover at the right levels. Accountants are skilled at reviewing and fine-tuning business processes to get positive outcomes – make the most of their expertise.
3. Cash flow projections
While you’re focused on your pricing and cash flow, you should be fine-tuning and/or developing your cash flow projections for the next 12 months, as well as the next 3–5 years. Get your accountant to look over your plan or projections and offer their advice.
4. Loan refinance and restructures
If you have existing finance, speak to your accountant as early in the process as you can. They can advise you on the most tax-efficient way to restructure your loan. For example, to not consolidate non-deductible debt with deductible debt. It’s also sometimes possible to convert non-deductible debt to deductible debt. Accountants are best placed to advise on these issues.
5. Changes to ATO payroll reporting
Over the past 12 months, the Australian Tax Office (ATO) has rolled out the most significant changes to payroll reporting in almost 20 years. The new Single Touch Payroll system will do away with end of year payroll processing for payment summaries. Instead, you must report your payroll transactions live at each pay period. All employers need to comply from 1 July 2019. Your accountant can help you set this up.
6. EOFY tax savings
Get in touch with your accountant as soon as possible to discuss any last-minute tax savings opportunities. This might include taking advantage of accelerated depreciation claims, changes to your stock levels or topping up your super. This is an area where a “one size fits all” approach doesn’t work. Your accountant will be able to provide you with very specific advice suited to your particular circumstances.
7. Business structure
Your business structure determines many things about your responsibilities and liabilities, including your tax exposure. In Australia, there are four main types of small business structure: sole trader, partnership, company and trust. Each structure has pros and cons, so discuss what the best structure for your business is with your accountant.
8. Longer-term tax planning
Looking for last-minute tax savings tips is not ideal. Much better outcomes can be achieved if you seek longer-term tax planning advice from your accountant.
This means engaging with your accountant on an ongoing basis throughout the year. It usually involves a detailed review of your accounts and overall position sometime during the year, giving you enough time to implement the recommendations before 30 June. Ask your accountant for the best process that’ll work for your business in FY20.
Has your end of financial year planning spurred a decision to invest in your business? You may want to consider a small business loan to help you achieve your goals. Our small business lending specialists are here to help. Find out more about Prospa’s different financing options or contact us on 1300 882 867.