• Business Growth & Optimisation

EOFY Checklist for Small Businesses

8 min. read26.05.2021
By Team Zeller

As EOFY is approaching, we've prepared a list of essential tasks.

The end of the financial year is a busy time for business owners. You have a laundry list of tasks to tick off — while juggling business as usual — and it’s easy for things to slip through the cracks. Yet as you focus on reconciling paperwork and updating your books, it’s worthwhile setting some time aside to plan for the financial year ahead.

Use the below checklist to work through your EOFY processes with ease, as well as put some practices in place to make the next EOFY easier.

1. Make sure your paperwork is up to date

There’s a lot of paperwork business owners need to navigate at EOFY. Starting with a reconciliation will help to identify any missing documents, and streamline the rest of your processes.

At a minimum, you should check you have up-to-date records of:

  • sales receipts

  • invoices and receipts for purchases made using business funds

  • payments to employees and contractors

  • all records concerning tax returns, activity statements, and employee super contributions

  • GST returns

  • JobKeeper paperwork

2. Find out what tax deductions you can claim

Running your own business can be expensive. Luckily, most money that is spent carrying on or protecting your business is tax deductible.

It makes good business sense to familiarise yourself with the specific deductions available to your industry, and claim what you can within the scope of tax law.

EOFY is a good time to give all your business’s equipment a once-over, in case repairs or replacements are needed. Spend some time checking your tools, whether that’s your restaurant’s ovens, your EFTPOS machines, your retail display cases, your hairdresser’s scissors — whatever your business relies on to turn a profit. If maintenance or replacement is required, it might be a good idea to organise and pay for those costs before 30 June.

3. Finalise payroll

If you employ staff, you’ll need to complete your year end reporting to the ATO.

Single Touch Payroll (STP) has streamlined the way employers report wages, superannuation and PAYG to the ATO. If you use STP, you no longer need to lodge an annual payment summary report; the ATO uses the automated reports you send throughout the financial year.

You have until 14 July 2021 to finalise your declaration to the ATO, stating that you have fully complied with the reporting requirements. If you require further information on STP, visit the ATO website.

The internal payroll matters that you need to reconcile include:

  • any unprocessed leave

  • outstanding invoices from contractors or freelancers

  • superannuation

  • long-service entitlements

  • any other payroll issues with financial commitments attached, such as bonuses

4. Carry out a stocktake

Businesses that buy or sell stock will need to perform an EOFY stocktake, detailing stock levels — as well as the value of that stock — as at 30 June 2021. Any lost or damaged stock can be written off.

Although you’re not required to perform a stocktake if you can reasonably estimate the value of your small business’s inventory and the figure hasn't fluctuated more than $5,000 in the last 12 months, it’s a good opportunity to clear out any out-dated stock as well as review your ordering processes. If there’s surplus, consider making adjustments next financial year.

Those businesses providing professional services must carry out a similar task, accounting for work-in-progress. Now’s the time to identify any resources being held up by individual projects, as well as any clients that aren’t paying their bills on time for ongoing work.

5. Write off bad debts

If you account for your income on an accruals basis, you may be able to claim back the tax you’ve already paid on a bad debt.

The first step is reviewing your invoices for outstanding receivables. You might like to first consider offering clients with outstanding debts a small discount on the amount owed, if they pay before 30 June. However, failing that, you can receive a refund on the GST paid by including the bad debt in your Business Activity Statement or annual GST return. You should, of course, document all efforts made to recover what is owed.

6. Process superannuation payments

Businesses with employees paid $450 or more per calendar month are required to pay a super guarantee on top of employee wages.

It pays to get ahead of your superannuation obligations. These contributions aren’t tax deductible until they’ve been paid. So, if you pay employee super contributions prior to 30 June 2021, you’ll be able to claim a tax deduction in this year’s income tax return — rather than waiting till next year.

7. Fix up your fixed assets

It’s time to account for the depreciation of your business’s assets. Put together a comprehensive list, including dates of purchase, price, and costs involved in the maintenance or repair of those assets.  Then, work with your advisor to determine which assets are depreciable, and for how long. Desktop computers, for example, are only depreciable for four years.

If you’ve taken advantage of the instant asset write-off scheme in the last 12 months, you can claim the business portion of that asset’s use in your tax return. The Federal Government increased the threshold from $30,000 to $150,000, per asset acquired, as part of its Coronavirus Stimulus Package. There are, however, caveats regarding turnover and installation or first use dates.

This scheme has been extended by a measure called Temporary Full Expensing, which covers the period from 7:30pm AEDT on 6 October 2020 until 30 June 2023. The measures allow for an immediate deduction for both new and second-hand assets, provided those assets are eligible for write-off. The write-off is available to businesses with an aggregated turnover under $5 billion.

Find further details about the instant asset write-off on the ATO website.

8. Run financial reports

Your profit and loss statement, balance sheet and cash flow sheet are three of the most important reports you should be running every EOFY. Keeping these reports up to date will give you oversight into the financial health of your business, and provide you with the insight necessary to make budget and planning decisions.

Once these are complete, you may want to revisit your business plan. Your financial advisor can use these reports to provide advice to help grow your business in the upcoming year. What are your goals for the next 12 months? What areas do you want to improve or change? This is also an ideal time to establish a new set of financial performance goals. Were you able to meet last financial year’s targets? What do you want to achieve?

Update your budgets for the next 12 months accordingly.

9. Review insurance policies

EOFY is an ideal time to review your insurance policies. Check that any policies you hold still provide an appropriate level of cover, both for yourself and your business, and compare insurance providers to ensure you’re getting the best deal.

The insurance required by both yourself and your business will depend on the type of business, its structure, size, and the industry it operates in. An insurance broker can help guide you through the process.

10. Back up and secure your files

Now is a good time to make a digital copy of all your paper files, and file them appropriately. Make sure to back up your files on a hard drive, separate from your computer.

The ATO requires businesses to keep records for a minimum of five years, and system failures are not an excuse for noncompliance.

11. Calendarise all due dates

Each year, you are required to lodge a tax return. The date by which you must lodge your tax return depends on your business structure.

  • Sole traders lodging their own tax return can do so from 1 July to 31 October each financial year. Sole traders lodging their tax return through a registered tax agent should contact their agent for more information.

  • For businesses operating as a partnership, tax returns can be lodged from 1 July to 31 October each financial year. Again, however, if a registered tax agent is involved they should be contacted for more information.

  • Company tax returns lodgement dates vary. The majority of company tax returns will be due 28 February each financial year, however we recommend you check the ATO website for your specific date.

If your business received payments under the JobKeeper scheme, this should be declared as part of the ordinary income of your business. The normal deduction rules apply for the wages paid to employees, where the JobKeeper payment subsidises those amounts.

There are a number of other documents you are required to submit to the ATO. Avoid unnecessary penalties by marketing the due dates in your calendar, and getting ahead of the paperwork early.

12. Review your finances

It’s best to work with a professional accountant and use this time to go over your past year’s growth and expenses, as well as plan for the year ahead.

If you’ve identified cash flow as an issue, sit down and consider where the shortfalls are occurring so you can pay your staff and suppliers on time, while growing your business, without going into debt.

There may be some easy ways to improve your business's finances that you haven’t thought of, such as recovering debt, rearranging your expenses, selling unneeded assets, consolidating debt, and speeding up the rate at which your takings are available for spending by switching EFTPOS terminal providers.

While some of these tasks may seem monotonous, they are essential boxes to tick at this time of year so that you can hit the next financial year running. Once you’ve worked your way through the above checklist, use the momentum to get ahead for next year.

Tips to make next EOFY easier

  • The ATO has built an app, myDeductions, for sole traders to easily record income, expenses and potential deductions. It’s freely available on the ATO website.

  • EOFY is prime time for tax refund scams. Keep your business safe by familiarising yourself with how cyber threats work, and remain vigilant.

  • If you haven’t already done so, consider separating your personal bank account from your business bank account. Capturing all business expenses in one place will make every EOFY simpler, and make it easier to manage your cash flow.

  • Mark 1 July 2022 in your calendar. The superannuation guarantee will increase to 10.5% on this date.

To fully prepare your business for the end of the financial year, schedule time to speak with your accountant or financial advisor. Please note this article is for educational purposes only and does not constitute advice.

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Understanding ABNs: A Comprehensive Guide for Soon-to-Be Business Owners

What is an ABN? An ABN (Australian Business Number) is an 11-digit number issued by the Australian Business Register that identifies your business to the government. It 's used for tax and other business purposes, and it can also be used by the general public to find your business on the ABN Lookup website. Who needs an ABN? Anyone who is running or starting a business or enterprise in Australia needs an ABN. If you’re not sure if your activity is regarded as a business, ask yourself the following questions: Will it involve commercial sales of products or services? Is the activity more than just a hobby? Ie. Do you intend to make a profit from it? Will you be repeating the activity? Will you keep records of the activity in a business-like way? If you answered ‘yes’ to the above questions, you will almost certainly require an ABN. An ABN is essential for various reasons. 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Registration as a charity: charities and non-profit organisations seeking registration with the Australian Charities and Not-for-profits Commission (ACNC) generally require an ABN. Government contracts: businesses engaging in contracts with the Australian government or its agencies usually need an ABN. Claim GST credits: to claim money back on GST that you’ve been charged on business supplies and expenses, the ATO will require that you have an ABN. Employer obligations: if you have employees, you need an ABN to meet your employer obligations, such as withholding taxes from employee wages. When do you need to register for an ABN? You need to register for an ABN prior to incurring income or expenses relating to the business. When you fill out the application form, you will be asked for the date that you expect to start your business. This date, however, cannot be more than six months in the future when you apply. Prior to applying for an ABN number you will need to have undertaken some relevant ‘commencement activities’ to prove that you are serious about setting up your business. These activities could be as simple as setting up a social media account or website, or purchasing business cards and stationery, or they could be more substantial steps such as purchasing a business; leasing a premises; obtaining insurance, equipment or stock; or applying for finance. It’s not essential to have undertaken all these activities prior to applying for an ABN number, but a certain number will be necessary to prove the legitimacy of the business. One thing you do need to do before applying for an ABN however, is to decide on the right structure for your business, for example, a sole trader, partnership, or trust. Read our article on how to structure a new business here. What documents are required to apply for an ABN? 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Of course if you choose to use a tax practitioner or another service then that may involve fees, but the process is actually very straightforward, so it's worth having a look yourself before asking for help. How do you apply for an ABN? There are two ways to register for an ABN: Via the online application form on the Australian Business Register website Via the online application form on the Business Registration Service’s (BRS) website . The advantage to applying through the BRS is that you can register a business name at the same time as your ABN application. If you don’t, you’ll need to go back to the Business Registration Service to register your business name. How long does it take to receive an ABN? If you have provided all the relevant information, and your application is successful, you will receive your 11-digit ABN immediately. If, after applying, you receive a reference number it means that the ABR may require additional details or information. Applications are usually received within 20 business days and they will contact you if further information is needed. How do you update your ABN details? To update your ABN details, including your business addresses, contact details, and business activities, simply log in to the Australian Business Register (ABR) online services. Once logged in, select 'Update ABN record' and follow the prompts. Changes made online take effect immediately. If online access isn't available, you can update your details by contacting the ABR directly, consulting your registered tax professional, or completing and mailing the appropriate form. It's important to update your ABN details within 28 days of any changes to your business. What if I forget to update my ABN details? Everyone makes mistakes every now and again, but it really is best to do your best to keep your ABN details up to date. If you forget, the Australian Taxation Office (ATO) could impose a fine ranging from $220 to $4,400, depending on the severity and frequency of the oversight. Also, outdated ABN information can hinder your access to government assistance, especially during emergencies. Government agencies rely on current ABN details, so inaccurate information may result in missed opportunities for support. Starting a business? Zeller has your finances covered. We know you’ve got a lot on your to-do list, but thanks to Zeller you can cross off ‘open a business transaction account’ in as little as six minutes. Plus, with a suite of tools to help you accept payments, manage your expenses and track your cash flow, Zeller will ensure you start your business on solid financial footing. Open a free Zeller Account today and you’ll gain access to: Zeller Transaction Account : a free account to store your funds. Zeller EFTPOS Terminal : the smart way to accept in-person payments. 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