Tax time. Words that can strike a mix of fear and dread into the heart of any small business owner. But they don’t have to.
While most years seem to fly by these days, it feels as though the end of the 2017/18 financial year has crept up on us enormously fast! June is a particularly busy time of year for many businesses (as a part of the financial industry at Omnisure… trust me when I say we get it), but small business owners need to set time aside this week to assess their financial situation and lay down some plans for the future.
Rather than drowning yourself in a tub of ice cream as your ‘June coping mechanism’ of choice, here are 4 ways you can get your business in shape at tax time…
1. Manage your business receipts
Reduce your taxable income by claiming tax deductions for many of the costs incurred in running your business (but remember that you must be able to show proof of purchase).
Being diligent about managing your receipts throughout the year can help make tax time a breeze. So if your receipt stash is looking like a box of kitty litter this year, start the process of creating an organising system for your receipts now (such as a simple accounting program) so you don’t miss deduction opportunities next year. After all, small businesses are required to keep financial records for at least 5 years, so it is well worth your time to get it organised properly.
It is also worth bearing in mind that should your business be audited at some point in the future, if you’re not organised this can be a hugely expensive process and a significant drain on your time. So why not look into whether tax audit insurance and/or cyber insurance (to keep all of your electronic records safe) is beneficial to your business.
Make sure you check with your accountant what you can and cannot deduct, as this will change depending on your business type and business activities. Talk to your accountant and see if you might also be eligible for a range of concessions, offsets and rebates. This will ensure you don’t miss out on any deductions.
2. Assess deductions and write-offs early
If you are a small business owner with a turnover of up to $10 million and have purchased a piece of equipment this financial year, you can immediately deduct the cost of eligible assets of up to $20,000! Also, take the time to check in with your accountant and see if you’re eligible for any tax concessions.
“Just make sure you finalise your purchase soon if you want to take advantage of the write-off this financial year,” Sam Allert, managing director of Reckon ANZ.
Businesses can also bring forward deductions on expenses for the next financial year, known as pre-paid expenses. These deductible expenses can include items such as office supplies and stationery, insurance and sometimes even rent!
3. Reassess your insurance(s)
Many insurances are due for renewal around this time of year.
Note: This is why you may see your omnisure broker downing black coffee like it’s water and seeming to have permanently red, puffy sleep-deprived eyes.
If you purchase your business insurance directly from an insurer, whilst it may be tempting to simply renew your current insurance policies, it does pay to set aside time to review your insurances with an omnisure broker instead.
By analysing your business to see what new risks your business may be exposed to, you can help ensure your business is appropriately covered. If you’ve added a new product, hired more staff, or purchased new machinery during the year, it is important to make sure you’re still adequately covered to protect your business in the event of a setback.
When it comes to renewing or taking out a new policy, speak to a Omnisure insurance broker, who is well equipped to assess where your insurance cover might fall short and recommend the most appropriate insurance for your business. You can browse some common products here, or simply call us on (02) 9959 2900 or contact us here.
4. Streamline your business technology for next year
Look for opportunities to streamline cash flow, payroll, invoices, compliance and reporting tasks. For example, implement a cloud solution which will do this.. and it comes with capabilities to help you to manage your receipts as you go.
Real-time access to your business is paramount in this day and age as a cloud solution will provide better efficiencies, enhance productivity and will make your business far more adaptable to growth.