Is your small to medium-sized business (SMB) prepared for the fiscal year’s end (EOFY)?
Wherever you are in your preparations, here’s a handy EOFY checklist – with recommendations for preparing your business for success in the new fiscal year.
SAP Concur has released a new EOFY checklist for Australian businesses to help them navigate their end-of-financial-year (EOFY) activities.
The checklist is intended to provide some recommendations and resources that businesses can use to make their EOFY process faster, smoother, and less expensive.
We at Dynamic Business highly advise you to consult with your tax expert for the most up-to-date information that applies to your specific business, but the EOFY checklist below might be an excellent place for small business leaders to start.
As international borders reopen and COVID-19 restrictions ease, Australian businesses are ramping up their operations. Simultaneously, businesses are under pressure to anticipate regulatory changes following the election while managing end-of-financial-year (EOFY) processes.
Furthermore, the reduced access to human resources as a result of COVID has increased the pressure on businesses to complete their EOFY reporting, which is especially difficult given that the Australian Taxation Office (ATO) is increasing scrutiny on recordkeeping, work-related expenses, and capital gains from crypto assets, physical assets, and stocks for the 2021-22 fiscal year.
According to the SAP analysis, there are three critical activities that Australian firms must take to prepare for the end of the fiscal year 2021-22. These include assessing recordkeeping activities, ensuring corporate information complies with current ATO regulations, and safeguarding the company against tax time frauds.
Review recordkeeping tasks
Check your financial records directly reflect what the ATO requires as a first step to reduce the time required to fulfil EOFY operations. As you start, run, sell, change, or close your business, you are legally required to preserve records of all transactions relevant to your tax and superannuation.
More specifically, all businesses need:
- a summary of income and expenses including employee travel and expense payments
- a stocktake to show current assets
- goods and services tax (GST),
- superannuation, and pay as you go (PAYG) tax withholding statements for the full financial year
- any documents containing details of any election, choice, estimate, determination, or calculation you make for your business’s tax and superannuation affairs, including how the estimate, determination, or calculation was made.
- Ensure financial information complies with current tax requirements
In the midst of the EOFY chaos, Australian businesses are especially exposed to tax-refund or tax-owed scams. From January to July 2021, for example, scammers stole more than $7.2 million in Australia by getting access to household computers.
Businesses that rely on employees accessing company systems from home face a considerable danger as a result of this. According to the Australian Competition and Consumer Commission (ACCC), the following are the most common sorts of hazards to Australian firms during the end of the fiscal year:
- False billing
- Malware and ransomware
- Whaling and phishing
- Online shopping
To guarantee your company is well-prepared, inform all employees about the possibility of targeted tax-time scams and have a mechanism in place where anyone who receives a tax-related email or SMS communication reports it immediately to the finance team.
Review the overall business position
EOFY is an excellent time to assess your organization’s financial situation and plan for the future year. This is especially important as the digital world accelerates the pace of company and market developments in response to global events.
It’s also the best time to re-evaluate spending on certain commodities or services over the course of the year. Using this strategy can be extremely helpful in identifying large operational cost savings.
Fabian Calle, managing director of small and medium business, SAP Concur Australia and New Zealand, noted that the Australian businesses have done it tough over the past few years with the combined impacts of sustained business interruptions caused by COVID-19, ongoing market volatility, and floods.
“Many organisations are doing their best just to keep the doors open and ATO compliance is a necessary factor, even though business resources may be stretched at this time.
“Increased ATO scrutiny on recordkeeping, work-related expenses, rental property income, and capital gains means the 2022 EOFY process is likely to be more time consuming and complex for most organisations compared to previous years.”
The SAP Concur 2022 EOFY checklist for Australian businesses can be downloaded free at https://www.concur.com.au/resource-centre/ebooks/end-financial-year-checklist-australian-businesses
Disclaimer: Dynamic Business does not provide tax, legal or accounting advice. This article has been prepared for informational purposes only by our contributor and should not be relied on solely for tax, legal, or accounting purposes.You are strongly encouraged to consult your advisors to determine how the information may relate to you or the specifics of your business.