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Author: Wendy Ng

End of financial year small business money matters

You should always be thinking about making the most of your hard earned dollar but the fast approaching end of the financial year is a natural trigger point.

People often say to me that they just aren’t good at managing money or that they are too busy trying to keep their business running to make time to think about it.
Other people tell me they just leave money matters to their partner (business or otherwise). Don’t do that. You may leave the nitty gritty to your other half as part of the division of tasks but you should always know what is going on.

You can get better at managing money. Break the task down into some small steps. Even if you change one or two things you’ll be better off.

Most importantly, get expert advice. Where money matters get a bit complex, all you need to do is ask some experts. Your accountant, a financial planner and your financial institution’s expert staff are there to help.

Here are three areas to look at before June 30.

1. How can you legitimately minimise your tax?

Businesses can do things such as delay invoicing and bring forward expenses to reduce the amount of profit on which they will be taxed. You can pay leave loading as unpaid accrued leave loading is not tax deductible. Think about writing off scrapped, obsolete stock and other assets.

Business, particularly small business, was a winner of sorts in the 2015 Federal Budget. The Government announced a cut in the small business company tax rate to 28.5% from 30%, effective from the 2015/2016 income year and thereafter. For unincorporated businesses (eg sole trader) there is a five percent tax discount in the form of a tax credit capped at $1,000. Small business will also be able to claim an immediate deduction for each asset with a cost of less than $20,000 until 30 June 2017. From 1 July 2016, all primary producers will be entitled to an immediate deduction for capital expenditure on fencing and water facilities, such as dams, tanks, pumps and water towers. Fodder storage assets will be depreciated over three years. New start-up businesses can immediately deduct start-up costs such as professional, legal and accounting services from the 2015/2016 income year.

If the Budget measures are passed by Parliament it is worth talking to your accountant about how they will benefit you. 

2. Get a handle on Super

Superannuation may sound boring but it’s really important. Women in particular are behind the eight ball when it comes to Super.

Women make up more than 50% of the population but they only have around 37% of Australia’s combined superannuation savings. The superannuation industry estimates 9 out of 10 women have insufficient super to support a comfortable standard of living in retirement.

There are lots of reasons for this, but the point is that we all, particularly women, need to take control of our super and retirement planning.

3. Review business plans, succession plans and the performance of your key business service providers.

Take a look at your insurance, accountancy, book-keeping, banking and legal services. Have you received value for money advice and timely service?

How is your bank doing for your business or personally? Have you got the right loans and investments at the right rates? Shop around. There are alternatives to the big banks and it is easier to switch than you think.

Get proper advice for your needs

Of course you need to get specific advice to meet your personal circumstances. Don’t be afraid to ask different people about ways to better manage your money so the money you work hard for works harder for you.

If you'd like to start a conversation with a Business Banking Specialist from The Greater, make an online enquiry in minutes here.

This is an edited summary of a presentation the Greater Building Society’s Armidale Branch Manager Wendy Ng gave to the Armidale Business Chamber’s Enterprising Women’s Breakfast on June 11. The Greater is a sponsor of the monthly breakfasts.