In his weekly business finance post our CFO Greg Taylor puts five things on a small business owner's "To Do" list before the end of the financial year.
The end of the financial year is almost upon us. Here are five things that the Greater Building Society’s business banking manager Stephen Skujins told me small businesses should look at before June 30.
Firstly, what are you doing to legitimately minimise the tax you will pay on this financial year’s earnings? Depending upon your financial position and how your revenue is assessed, you may wish to delay invoicing so the revenue doesn’t count this year. Look at prepaying business expenses under $1,000 or salaries to increase your allowable deductions.
You may also benefit from writing off scrapped, obsolete stock and other assets. Consider bringing forward maintenance or other expenses to bring down your business income. Ideally, you should have done this a little earlier than now but better late than never.
Speaking of tax, have you contributed to your own superannuation this year? Contributions up to $25,000 can be tax effective as they are taxed at 15 per cent rather than your marginal tax rate. (In 2013/14 the concessional cap is 35,000 for people aged 59 and over.)
Next, look at your staff payments. Pay leave loading as unpaid accrued leave loading is not tax deductible. Did you know that if you register employees in new jobs with the Office of State Revenue you may be eligible for a $4,000 payroll tax rebate?
It is also a good time to review the performance of your key business service providers in areas such as banking, insurance, accountancy, book-keeping and legal services. Have you received value for money advice and timely service?
Make the time to review business plans and succession plans too. Are you meeting your business targets and what key changes do you need to start making for next year? I will talk about succession planning more next month but you should always have an exit plan from your business.
See your accountant or business adviser for their advice on what needs to be done for your specific circumstances.
This post is based on Greg's weekly column in the Newcastle and Lake Macquarie Post newspaper.