Top Tips for Hospitality Operators Preparing for EOFY

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27.05.2022 Business tips

Top Tips for Hospitality Operators Preparing for EOFY

Discover 8 simple tasks you can tackle today to streamline your EOFY processes.

The end of the financial year brings with it a long list of administrative tasks. No business owner looks forward to all of the paperwork required. It’s a lot of work — particularly for hospitality merchants juggling 7-day trade at the same time.

The trick to mitigating the extensive time commitments of EOFY is getting prepared sooner. Not only will doing the legwork now alleviate the time and paperwork required of you later, it will set your business in better stead for the new financial year. Plus, you may discover ways to minimise the money owed to the ATO and have the time to capitalise on them.

To ensure you put the right foot forward as the end of another financial year draws close, we’ve put together a list of eight things you can do right now to alleviate the headache of tax time.

1. Chase outstanding invoices

In Australia, invoices are paid an average of 25.5 days late. Getting on the front foot now will ensure your accounts receivables are reconciled in time for EOFY. Plus, you'll improve your cash flow as payments land in your account.

To speed up the process, it’s best to invoice as soon as possible. The sooner you invoice, the higher the likelihood of being paid before EOFY. Better yet, take payment on the job with a mobile EFTPOS terminal. When you accept payment via Zeller Terminal, funds are swept to your Zeller Transaction Account overnight — available for spending on your Zeller Mastercard. It's the fastest way to speed up your cash flow.

2. Capitalise on the instant asset write off with some new purchases

Considering a new commercial oven? Now is the time to purchase and install it. With an instant-asset write-off limit of $150,000 for each asset – now newly extended to the end of the next financial year – you can purchase major assets such as fridges, ovens and coffee machines and have the business portion immediately deducted.

Again, with cash flow on your side, purchasing now can mean a sizeable tax break, allowing you to cruise into the new financial year with a bit more cash in your back pocket — rather than wait another 12 months for the end of next financial year.

3. Pay your invoices

When it comes to footing the bill for wages and utilities, it’s not just what you pay — but when you pay it. 

It sounds obvious, but paying your invoices early could save you a lot of dollars. That’s because many merchants and suppliers are often willing to negotiate shaving a portion off the outstanding amount if you’re willing to pay early. If your suppliers are amenable, not only will you save money — you’ll be minimising the amount owed at the end of the financial year.

4. Do a stocktake

It’s the last thing you ever feel like doing, but it could be one of the most valuable. Taking stock will give you oversight over what you have on hand. 

If you have a turnover of more than $10 million, you actually don’t have a choice as to whether to undertake a stocktake or not — you’re legally obliged to. If you have a lower turnover and can reasonably estimate stocks valued at more than $5,000, you may be eligible for tax deductions or GST credits.

5. Buy up on discounted products

As time-consuming and laborious as they are, stocktakes can pretty quickly tell you if your product levels give you the room to capitalise on EOFY sales. A lot of your suppliers will no doubt be trying to offload excess stock, which leaves you in a position to cash in on the lower prices.

If you have the room and the knowledge of how quickly stock moves, buying in bulk today could save you a lot tomorrow.

6. Get on top of your deductions

Put simply, a tax deduction is something you paid for with your own money to support the running of your business or venue. This means when it comes time to do your tax return, you can deduct this cost from your taxable income — reducing the amount owed to the ATO.

While something like the cost of a single chair may seem a marginal deduction, when you combine all of your costs across a whole financial year, it can save you thousands.

The most common tax deductions for hospitality business owners include:

  • uniforms
  • tools and equipment, including payment hardware such as EFTPOS terminals
  • car expenses
  • travel expenses
  • home office running expenses
  • self-education expenses

7. Arrange for a depreciation schedule

With each day that passes, the fit-out of your business or venue depreciates. If you’re properly prepared, you could be reaping the benefits of every cent. 

Regardless of whether you own or lease your premises, any building works completed or plant and equipment assets added in the last financial year could work in your favour at tax time as the depreciation can be claimed as a deduction. Think paint jobs, expansions, new flooring, renovated bathrooms – you name it, you can claim the depreciation of it.

The cost of the depreciation schedule itself is also totally tax deductible. 

8. Make the most of your spare cash

If your cash flow is looking healthy, consider how you can put any spare funds to work to help lower your taxable income. This could include prepaying expenses — if you have an annual turnover of under $10 million, you can claim an immediate deduction for up to twelve months.

Are there delivery vehicle lease payments you could pre-pay? Perhaps there are regular stock purchases you could also pay for now ahead of the new financial year? Whatever it is, paying for it now could mean footing a smaller bill after June 30.

Being in the know about how to prepare for tax time is the biggest cost-saving measure of all. It’ll minimise stress, hassle, and most important of all – your tax bill.

Now that you’re prepared for the end of the financial year, keep up with the latest Zeller updates and announcements by subscribing to the Zeller Business Blog newsletter below.

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.