The head of an accounting body is urging small business operators not to be complacent about their tax affairs, with the end of the financial year now less than four months away.
Clive Barrett, executive chairman of First Class Accounts Bookkeeping, said this typically quieter part of the year is an ideal time for businesses to look at expenditure and prepare for tax time.
“There’s not much you can do about set costs such as rent and rates; however, there are many areas where savings can be made,” Mr Barrett said.
“The cost of labour is one obvious area. Another is electricity and phone. Do some research and see if you can get a better deal with another provider for these necessary utilities.”
According to Mr Barrett, superannuation is where small businesses most commonly make costly mistakes.
“More and more I see small businesses struggle to meet their superannuation payment deadlines. This is concerning as the ATO is starting to clamp down on this area, and small business owners may find themselves facing hefty fines for not meeting deadlines,” he said.
“Heavy penalties like these are ill-afforded by small business owners, but they can be avoided by pre-planning and ensuring a little bit is put away every week to cover the obligation.”
Low-fee interest-bearing accounts are one option that can help small businesses put away money for PAYG instalments and superannuation payments, Mr Barrett said.
“As the end of the financial year looms, we all get very busy crunching numbers and there’s very little time for analysis or reflection,” he said.
“So while there’s relative calm this time of year, it pays to look back at the third and fourth quarters from previous financial years and analyse the data for trends."
He added: “You need to look for peaks and troughs in the figures, then ask yourself: why? Is there anything you can do to mitigate those losses in the upcoming third and fourth quarter? If there’s a noticeable slump in sales in April, you could perhaps increase your marketing spend in February and March, or encourage staff to take their holidays during this period.
“It’s not too late to make a positive difference to the bottom line for this year, but if a business owner misses the opportunity to plan and assess their situation, it could end up worse.”