The summer break is the midpoint of the financial year in Australia as well as the time to relax with family and friends.
If you can tear yourself away from the pool or beach for a few hours, it makes sense to spend a few hours looking at your business accounts. Doing some financial housekeeping will help you to take stock, make a plan for the next six months and prepare for your next tax bill.
Here are some financial housekeeping tips from a tax accountant:
Check your tax situation
Many businesses refer to the previous year’s tax return when putting cash aside to pay tax.
However, if you have found ways to boost your profits over the past few months, your tax bill will be higher than it was last year.
The midpoint of the financial year is a good time to check in with your tax accountant about where you stand in terms of tax. Paying an estimated amount each quarter is helpful but you don’t want to find yourself with an additional bill you’re not prepared for.
Touch base with your tax accountant to find out if you should be putting extra funds aside than previously estimated and you’ll save yourself from bill shock.
Review your expenses
Inflation and the rising price of finding good people have left many businesses strapped for cash in 2022. Take a minute to review your expenses to identify subscription creep and spot the things you’re paying for but don’t really need.
It may even be worth hiring a consultant to review your long-tail expenses in detail. There are services that can review your supplier contracts and general expenses to potentially save your business thousands of dollars.
Look as well as what your staff have been spending. Seemingly small expenses on things like office supplies or entertainment costs can add up over the year. If you have a few people splashing out on high-cost items, it can quickly damage your budget.
Part of your financial housekeeping may be to put stricter rules or checks in place for employee spending. You may wish to create guidelines or review the number of people who can make purchases without approval.
Review your performance
Once you have looked at your spending, look at how your revenue and profits are going as well and find out how closely they match your forecasting.
Some business owners get to the end of the financial year and realise they haven’t been making the money they were expecting. If you’re falling behind on your targets, it’s better to know sooner rather than later. If you don’t have a tax accountant helping you, take the time to see how you’re tracking for the financial year.
If you do have a tax accountant and you want to focus on your holidays, make an appointment to go over your performance early in the new year.
Now you have looked back, take a moment to figure out what you want to achieve over the next six months.
Think about ways you can increase revenue as well as minimising your expenses. Once you have had a look at your top revenue-generating goods or services, you may be able to identify add-ons and easy wins that boost your profits.
Find a better accountant
Being prepared at tax time is essential if you want to stay ahead financially.
If your tax accountant isn’t meeting your needs, the new year is a great time to find a new one.
Mobbs & Company are reliable, knowledgeable and experienced. We offer a responsive and efficient service to help small businesses stay in control of their tax obligations all year round. Contact us for personalised service and ongoing support that helps achieve a positive financial future.