The end of the financial year can be a stressful time for business owners, especially if you are not prepared. Staying on top of your accounting and bookkeeping tasks throughout the year will ensure that you are ready when tax time rolls around. However, if you fail to be diligent with your financial records, you could quickly find yourself scrambling to get your books in order, taking you away from the more critical tasks associated with running your business.
The end of the financial year is an important time for small business owners and you need to ensure that you prepare ahead of time so that everything goes as smoothly as possible. Using online payroll software and other online financial tools, you can manage your business finances with more confidence and automate many of your reporting obligations to the Australian Taxation Office (ATO) and ensure that you are ready when tax time arrives. Using the right tools will help to ensure that everything is submitted properly and on time so that you avoid being issued with penalties or fines.
Let’s take a look at a few useful tips to help you to prepare for tax time.
Make A Note Of The Deadlines
To set yourself up for success at the end of the year, you need to do the right thing at the beginning of the year. As soon as the financial year begins, be sure to make a note of the important submission dates that you need to be aware of. Add these dates to your business calendar and set reminders a week or two in advance to ensure you have time to address any last-minute issues. Knowing when your reports and documents are due will help you to plan for tax time with more confidence. If you need to know more about taxes, deducations, etc. we suggest you to hire https://taxreliefprofessional.com.
Understand What Deductions You Can Claim
The ATO allows you to claim a tax deduction on many different costs associated with operating your business. Understanding what deductions you can claim can save you hundreds or even thousands of dollars by reducing your taxable income at the end of the year. If an expense contributes to your business generating revenue, then there is a good chance that it will be deductible.
Keep Accurate Records
If you want to avoid any potential issues with the ATO in the future, it’s crucial that you maintain accurate and clear records of your business transactions. Whether you keep digital or hard copies of your receipts, it’s vital that you take the time to file away your receipts so they can be easily found when you need them. Creating an organised record system for your receipts will ensure that you are ready to verify any transaction should the ATO make any requests.
Australian tax law also requires businesses to keep some records for a minimum of five years. These records include bank statements, sales receipts, credit card statements, expense invoices, asset purchases, lists of debtors and creditors and vehicle records. You must also keep employee records such as wages, contracts, tax information and super contributions on file for a minimum period of five years.
Make Sure That Your Business Is Fully Prepared When Tax Time Arrives
Many business owners dread the end of the financial year as they find meeting their obligations a stressful and time-consuming process. However, with a little planning and preparation, you can make sure that your business is fully prepared when tax time rolls around. Staying on top of your finances throughout the year and keeping accurate records will allow you more peace of mind when the end of the financial year approaches. Preparing ahead of time, your business will experience minimum disruption and you can avoid going through another stressful EOFY experience.