The end of the fiscal year (EOFY) is a pivotal time for any business. You’ll need to finish your bookkeeping, file your tax returns, and plan for the upcoming fiscal year.
And whether you’re just starting in business or have been running your own for years, the end of the fiscal year (EOFY) can be crucial.
To help you understand what you can do now that will pay dividends later, Kerry Agiasotis, APAC President of The Access Group, has compiled the top 5 things you need to know to close out the financial year and set yourself up for a flying start to FY23.
Get curious about your year ahead.
You need to know what the year ahead looks like for your business. What do you want to achieve? What’s your budget? KPIs? Will you need to hire more people?
Undertake some scenario planning. With inflation and interest rates rising, that’s even more important this year. What would be the impact on your business if expenses blew out? If fuel costs increased 10%, for example? Wages? Interest rates? Would you need a loan? Understand the different thresholds for your business and plan accordingly.
Don’t let the deduction boat sail without your refund
Hindsight is the most outstanding teacher. But if you haven’t spent to take advantage of incentives and deductions like assets you might need, 20/20 hindsight will only fill you with regret, no refunds.
Make sure your payroll deductions are reported correctly and avoid common errors businesses make, including:
- Not reporting Salary Sacrifice Superannuation as “Reportable Superannuation.”
- Not reporting Union Deductions as “Fees.”
- Reporting donations made through payroll as “Workplace Giving”.
Get to grips with compliance and changes
The Access Group recommends training before SOFY to get on top of system, compliance or legislative changes. This year, for instance, you need to check your employee’s contracts to see if superannuation payments are included in their salary.
With superannuation going up to 10.5%, the extra 0.5% may need to come off an employee’s salary. While most employees pay super on top of the annual wage, if you pay a “total package including superannuation”, you’ll need to adjust salaries accordingly before the first payroll in the new year.
Review your payroll to see if you have any employees with a Tax Variation in place for the current year. Remind them to provide their new Tax Variation approval from the ATO and change to standard tax if it’s not received.
Do a systems review
Now is a great time to take a few hours out of your day-to-day activities to review your system, look at the allowances, deductions, leave and super and ensure everything is working as you would expect. Are STP2 changes sorted? Compliance?
Look for opportunities to streamline. Could you use tools to automate some work and eliminate manual entry (and errors)? Would you hire a bookkeeper to come in monthly and give you cleaner records at year-end and more time back during the year? Are you using the most appropriate software for your industry and organisation? Could you simplify things by connecting payroll and finance systems on a single platform like Access Workspace?
Optimise payroll for the year ahead
Whether you’re paying a hundred or a handful of people, there are things you can do now that will make payroll more straightforward to manage throughout the year.
Create a payroll schedule for FY23 – include payroll cut-off dates, payroll due to bank dates, names of payroll bankers/approvers (ask when they are on leave to make sure someone is always available for banking), and a leave planner, so there’s a replacement for when you take leave.
- Set up a monthly email with payroll deadlines – including timesheets, leave forms and expenses and send it to all employees.
- Do a public holiday review – check they don’t clash with a banking day. If they do, let your approvers know.
- Annual Awards check – the Academy Awards are held once a year. Make reviewing the Awards in your business a yearly event too.
To maximise deductions, incentives and entitlements, ease the end-of-year rush and set your business up for success, you need to be prepared.
Going through your payroll and reconciling now – and making it a monthly habit – will mean no nasty surprises next EOFY.
Kerry Agiasotis has more than 25 years of senior leadership, business management, sales and consulting experience gained primarily within the Technology and Financial Services Industries.
Dynamic Business does not provide tax, legal or accounting advice. You are strongly encouraged to consult your advisors to determine how the information may relate to you or the specifics of your business.