As the End of Financial Year (EOFY) approaches, a financial storm cloud is brewing for many Australian SMEs.
A new study by Intuit QuickBooks reveals a widespread case of “Receipt Regret,” with lost and damaged receipts potentially costing Aussie SMEs a staggering $948 million in unclaimed expenses. This disorganisation isn’t just a minor inconvenience – over half of SME owners surveyed admit they regret not keeping better track of their receipts throughout the year. With tax time fast approaching, this lost income could have a significant impact on their bottom line. Let’s delve deeper into this “Receipt Regret” phenomenon and explore how it’s impacting Australian businesses.
Receipt Regret” is a term coined to describe the feeling of frustration and missed financial opportunities experienced by business owners due to lost, damaged, or disorganized receipts.
Research reveals that tax returns can be an arduous task for already busy SME owners without proper management systems. Nearly 1 in 5 (19%) SME decision-makers admit feeling anxious about doing their taxes this year, while 13% feel overwhelmed. Only 36% of SMEs feel prepared for tax season.
Accurate record-keeping via receipts is proving challenging. Almost half (47%) of SMBs say their receipts have faded due to sun exposure, while 42% have misplaced or lost receipts during tax season. Nearly one in four (24%) have been unable to claim a business expense in the past due to illegible or damaged paper receipts.
In a cost-of-living crisis, every dollar counts, making it crucial for time-poor business owners to improve their processes. “For SMEs, using technology effectively to avoid receipt regret at tax time is more crucial than ever,” said Damien Greathead, Accounting and Advisor Group Lead at Intuit Australia.
EOFY Stress
The additional time spent preparing for the end of the financial year adds stress for SMEs, with nearly 1 in 4 (23%) saying it affects their overall work-life balance. A quarter (25%) report spending about 10 hours preparing their tax returns, while 13% spend 15 hours or more. Surprisingly, 2-in-5 (40%) SMBs tackle the task themselves without expert help.
The research also indicates that over a third (33%) of the businesses surveyed seek streamlined digital solutions for receipt management, and 29% desire more reliable storage methods to improve efficiency at tax time.
“It’s concerning to hear that so many SMEs are experiencing this level of stress at tax time, because help is available. Small Businesses are the backbone of our economy, but so many small business owners are time poor and burdened by admin tasks that impact their work life balance,” said Greathead.
“Our advice to small businesses is, you don’t have to go it alone. Working with an advisor in conjunction with reliable and affordable accounting software like QuickBooks can make a huge difference to keeping on top of business admin and managing stress,” he said.
“Our snap and store receipt function allows SMBs to capture business costs on the go when using our mobile app, ensuring potential business expenses are tracked in real time and receipt regret is eliminated. Through surveying our own customers, we know that 90% agree the QuickBooks mobile app makes it easy to stay on top of their expenses,” said Greathead.
Visit Intuit QuickBooks’ EOFY Hub for tips and more information to make tax time less stressful this yearhttps://quickbooks.intuit.com/au/taxes/end-of-financial-year/ .
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