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Housekeeping Tips at the End of Financial Year (EOFY)

Housekeeping Tips at the End of Financial Year (EOFY)

EOFY can be a stressful time for many businesses, but it can be a lot more manageable if you get your books in order early. Find out more here.

1st June 2020
Reading Time: 3 minutes

The EOFY rush when June runs into July has customers pull in last minute expenditures and sellers pull in last minute sales. This is all the whilst keeping on top of financial statements to file your tax return. With accounts not up to date, unmet sales targets, and demanding customer expectations, business owners will be frantically trying to keep with the rush. In this guide, we’ll outline some housekeeping rules to keep you in check before the financial year ends.

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5 Housekeeping Tips for your Business this EOFY

1. Ensure your financial records are correct and up to date

Make sure that your profit and loss statements are drawn up. This means they need to record all business transactions for the year. Furthermore, ensure that your balance sheets cover all business assets and liabilities for the period. The simplest way you can do this is by continually updating your records every month. If you don’t, you may find yourself with a large backlog when EOFY approaches.

2. Perform a stocktake

Businesses that purchase or sell stock should find out whether they are required to do a stocktake. This is because it allows your business to keep records of all stock sold, on hand or broken. For more information regarding stocktake, visit the ATO website. Even if your business isn’t legally required to do a stocktake, it’s always a good idea to keep track of it.

3. Claim tax deductions

Research what tax deductions you can claim. This will come from your business’s taxable income before lodging your tax return, so your depreciating assets will not be overtaxed. This includes, but is not limited to travel expenses, wages expenses, and marketing expenses. The Government has expanded its list of deductions for this year due to the COVID-19 pandemic. A good example of this is that you can now claim 80 cents for every hour that you work from home. For small business owners that work from home, this could mean a huge saving.

4. Backup your data

All of your records and data should be stored in a secure location off-site. This is to protect your information from being exploited by a third party. Further, keeping your records online will mean that they are easier to find and harder to misplace. If the files are online, it is recommended to have auto-sync to update the file frequently.

5. Use a registered tax agent and/or accountant

When seeking advice or aid in financial statement preparations, hire someone with the right qualifications. This is crucial, because if they aren’t qualified, they may not have the ability to give the right advice. Some tasks your agent or accountant will undertake include:

  • Reviewing your business plans finances, and also insurance
  • Reviewing your business structure
  • Checking for tax and regulation changes

Finally, it would be wise to keep a lookout for scammers during this time. Taxation scams often target businesses and lure you through either tax refund scams or underpaid tax scams. The Australian Taxation Office would not email, SMS or call you for your personal information. You should always confirm with the ATO if such messages were sent by them before taking any action.

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Author
Ivy Shi

Ivy is a keen catalyst of technological advancement in legal processes for businesses and society. She currently works with the content team at Lawpath as a Legal Intern and is undertaking a double degree in Commerce and Law at Macquarie University.