Nearly one third of Aussie SME business owners have already started preparing their financial reports in preparation for the forthcoming end of financial year compliance obligations, according to the latest MYOB Business Monitor.
In the March 2014 MYOB Business Monitor, 31 per cent of SMEs reported that they start preparing their financial reports at least a month before EOFY. A further 17 per cent stated that they start their preparations in the weeks prior to June 30, while only 12 per cent reported not starting preparation until two months after the financial year ends. According to MYOB, nearly 64 per cent of SMEs use an accountant and a further 13 per cent use a bookkeeper to help them with EOFY compliance.
“Preparing for EOFY early means SMEs can start the new financial year on the front foot,” MYOB CEO Tim Reed said. “While EOFY is a compliance-driven exercise, it can be an ideal opportunity to draw a line under the previous year and look at what worked for your business, and what didn’t. This way when you look ahead to the next year you’ll have a much better idea of what activity will drive your success.”
The March 2014 MYOB Business Monitor survey also highlights that SMEs can face a tough few weeks ahead as they grapple with EOFY requirements. 31 per cent reported working weekends, 20 per cent have worked past midnight and 14 per cent turned down invitations to catch up with friends in order to complete their EOFY obligations in the past.
If EOFY is far from your favourite time of the year as a business owner, here’s some tips to help take some of the pain out of the process.
1. Take advantage of deductions, write-offs and rebates before June 30: Contact your accountant to discuss the deductions, write-offs and rebates available to your business before June 30. Take action to scrap worthless stock, plant and equipment by reviewing your asset register, which keeps track of your company equipment including items purchased, sold or disposed of.
2.Provide relevant information to your accountant or bookkeeper: Once the previous step is completed, provide all necessary financial information to your accountant or bookkeeper. There are several options; for example, have them make a point-in-time copy from your data file in the cloud, or provide them with a secure copy of your backed up files. Check what best suits them.
3.Finalise end of year adjustments: Your accountant or bookkeeper may want to make a number of adjustments to your reports or accounts. Once changes have been updated, lock all accounts relating to that year so that data remains accurate. This will help ensure an easy transition into the new financial year.
4.Create a separate copy of your accounts and back it up: Whether you’re working on your accounts in the cloud or on your desktop, you should seriously consider making a point-in-time back-up outside your accounting system that creates a data file for the 2013/2014 financial year only. Carefully save and store your 2013/2014 financial year file elsewhere in the cloud or offline.
5.Prepare for the new financial year: The end of financial year shouldn’t be all reports and numbers. It’s also a good time to reassess and tweak your business plan and ensure you’re on the right path for next financial year. It’s a good idea to review your accounting software and think about how your business can benefit from cloud accounting solutions, whether that’s moving to online accounting or removing pain points by using add-on solutions.