End of financial year checklist for small businesses
Ensuring your business has everything in order at the end of the financial year helps to streamline required financial reporting. The Australian Taxation Office has a set of requirements that every small to medium sized business has to meet at the end of every financial year. These include documentation and details of your business income and expenditure you’ve incurred throughout the year.
This process not only provides the ATO with the necessary information to work out your tax but also creates a clear picture of the financial health and direction of your business which allows you to plan for the future.
When is the end of the financial year?
The financial year end date for Australia is 30 June.
Small to medium sized business end of financial year checklist
Your accountant or bookkeeper will need a copy of your financial records to be able to accurately report to the ATO. Most cloud-based accounting software programs such as Xero and MYOB allow your accountant to access these records remotely, removing the need to download and pass on detailed files.
Some of the end of financial year (EOFY) tasks on this checklist are relevant to all Australian businesses, however other aspects will vary.
- Create a summary of your business income and expenses - this is often in the form of a profit and loss statement.
- Carry out a stocktake - if your business buys or sells stock you will need to perform a stocktake which includes detailed information such as the stock on hand at 30 June and it’s value.
- Reconcile your cashbooks.
- Create a summary of the purchases or proceeds from the sale of equipment or property, as well as any other business finance arrangements.
- Put together a list of your business assets - including dates of purchase, price, costs involved in maintaining or repairing, and any that qualify for instant asset write-off.
- Bank statements for the year including the total interest paid, closing balance at 30 June, and details of each deposit and expense.
- Document the businesses debtors and creditors.
- Get records of asset purchases or expenditure on improvements - this is needed to work out capital gains tax calculation and depreciation estimates.
- Lodge PAYG yearly report and finalise income statements for single touch payroll.
- Lodge a fringe benefits return - if relevant
- Compile annual GST return
- Lodge income tax returns.
- Assemble a list detailing all government related payments, grants or rebates - including JobKeeper, etc.
- Put together documentation of business loans - including balances at 30 June and interest paid over the year.
- Compile a record of contractor or labour hire payments and details of the relevant agreements.
- If relevant, create a record of motor vehicle expense records and compile log books including odometer readings from start and finish of the year and total kilometres travelled.
- Document the business insurance policies and premiums paid for the year. Review insurance to ensure the current level of cover is adequate and that premiums protect any changes made to the business over the previous 12 months.
- Create a record of the petty cash spending for the financial year.
- Ensure all superannuation requirements are met.
- Copy any paper records and digitally back up.
- Review or speak to your accountant or financial advisor about any relevant tax updates or changes.
- Consult with your accountant or tax agent about potential tax deductions and concessions you could claim and ensure you have complete records of these expenses.
- Make a plan for next year using the information you have put together. Review what went well in the past year and what changes need to be made to improve in the future. Set strategies in place to achieve your financial and business goals for the next period.
- Review your business structure - could it be adjusted or updated to better suit your current situation?
Handy EOFY resources & tips
- The ATO app’s myDeductions is great for recording income, expenses and potential deductions as well as photos of invoices and receipts for sole traders - ato.gov.au
- Look out for tax refund scams which frequently target businesses around tax time - find out more about keeping your business safe on the internet here - business.gov.au
- More information on Instant asset write-off can be found here - ato.gov.au
Speak to your accountant for specific advice relevant to your business and professional end of financial year reporting services.
This web page and its contents are general in nature. You should always speak to a professional regarding your exact circumstances before making any decision in relation to creating a trust of any kind, as the information contained on this page may not be suited to your needs.
Resources - https://www.smallbusiness.wa.gov.au/sites/default/files/2020-end-of-financial-year-checklist.pdf, https://www.business.gov.au/Finance/Accounting/Essential-tasks-at-end-of-financial-year-EOFY