Published on 15/06/2016 by Punchmedia

EOFY: A Big Time for Small Business

The End of the Financial Year (EOFY) is always a big time for small businesses, so we decided that leading into June 30 we at AnyBusiness.com.au would share with you all the dos, don'ts, tips and tricks in a series of articles to help you get through it. We begin the series with the recent budgetary announcements that may affect your business moving into 2016-17 and some general tips to keep your business on the right track.

These tips will assist in planning and setting up for the 2016-2017 financial year - remember putting the hard work in now will assist with organisation and success in the long run.

Budgetary Updates

From July 1 the corporate tax rate will be 27.5 per cent for the 870,000 businesses with turnover of up to $10 million. This builds on the 2015 budget, which cut the tax rate for small businesses with less than $2 million turnover to 28.5 per cent.

The Breakdown:

  • Small business tax rate lowered by 1 per cent to 27.5 per cent from July 1, with the turnover threshold increased from $2 million to $10 million.
  • 870,000 more businesses to be taxed at small business rate.
  • The threshold will be pushed out to $100 million by 2020, and all businesses, including large firms, to pay 25 per cent company tax within a decade.
  • Businesses with a turnover up to $10 million will pay a reduced company tax rate of 27.5 per cent.
  • Businesses with a turnover up to $100 million to gradually receive 27.5 per cent rate by 2020.
  • All businesses to receive reduced company tax rate of 27.5 per cent by 2024 and 25 per cent by 2027.
  • Unincorporated small businesses with a turnover less than $5 million get a tax discount of 8 per cent.
  • Businesses with a turnover up to $10 million receive $20,000 instant asset write off, expiring in June 2017.

Essential Tips & To-Dos

1. Use a Registered Tax Agent

This is a simple one, ensure your tax agent is registered with the Tax Practitioners Board – link. Unfortunately there is no protection for taxpayers who use unregistered agents so this is certainly an aspect you need to be aware of.

2. Review Finances

Whilst you can complete this task on your own, it is advised you sit down with your accountant or bookkeeper for a subjective third-party viewpoint to then review your finances.

  • Did you meet your targets last financial year?
  • What can you do differently next financial year?
  • Set performance targets – these will help you to stay on track
  • Create a cash flow forecast – this will help manage any potential shortfalls and ensure you can still pay staff and suppliers

3. Analyse and Update Marketing & Business Plans

Reviewing and analysing previous marketing and business plans can often be overlooked. Do not underestimate the power of such tasks; doing so will help with the following:

  • Assessing performance of current strategies – are they working? If not, why?
  • Reiterate and redefine current goals and priorities – this helps with accountability and staying on track
  • Prioritising the efforts of the business and employees in order to maximise output

Similarly, look at the structure of your business. Does it need restructuring or changing? Or, is it working as effectively and efficiently as possible?

4. Review Insurances

Insurance is one of those things that you just to have to be across, despite it being dull and time-consuming. Check that you have the right level of insurance, if you are unsure, make sure you check with a professional who knows the ins and outs of your business.

Particularly if your circumstances have changed, don’t assume you’re covered. In fact, it may even be beneficial to read the product disclosure statements carefully, as the definition of certain terms can vary from one insurer to another.

5. Backup & Secure Files

Use the end of financial year as a reminder to backup your data. Financial, registration, customer, and other important business data documents and details need to be secured in an off-site location. This will ensure that if anything untoward happens, you will still have important documentation to keep your business up and running.

 

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punchmedia

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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