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Are you ready for EOFY?

Are you ready for EOFY?

With June being literally just around the corner, the end of this Financial Year is rapidly approaching. There are a few things that you as business owners to keep you accountants;¬†and bookkeeper ūüėČ; happy.

If you have staff, there are some important changes coming up in July to be aware of as well, and finally, the latest NSW Government rebate available for small business.
 

Getting ready to say goodbye to 2020-2021

As a small business owner, there are a few things you can do in your business to get ready for the end of the Financial Year, and below are just a few of them. Remember, this information is general in nature. If you want information specific to your business, talk you your Bookkeeper or Accountant.
  1. Get paid
  2. Pay your bills
  3. Pay your staff super early
  4. Banking
  5. Close off your POS system and 
  6. Stock take
Get paid
This may seem obvious, but there are many small businesses in Australia who are owed money. 

I'm not going to go into the psychology of bill payments here - I'll keep that for another day, but as you go into June, check your Accounts Receivable and check what invoices are outstanding.

You may need to send a reminder or a statement to your customer as a prompt to pay you, or in some circumstance, you may need to pick up the phone.

Oh, and make sure you've reconciled all the payments you've received first. There's nothing worse than chasing money which has already been paid!

Pay your bills
As you come into the end of the year, have a look at your Accounts Payable. If you have old bills sitting there not paid, now is a good time to pay them. If you find you are in a position to do so, pay any bills due in July, early. 

Not only will this maximise any deductions you have for the year, you will also reduce your liabilities going into the new year, and in some cases, may not have much outlay at all in July.

Pay your staff super early
Just like paying your bills early, paying your staff super early will also help you maximise your deduction and reduce your liabilities going into the new Financial Year.

There is however a catch with super. To be a deduction the money must be received by the relevant funds by the 30 June. If you want to take advantage of this deduction, I recommend paying any staff super through your relevant clearing house by 20 June.

If you are one of my clients, I will be in touch early in June to see if this is something you wish to take advantage of and to ensure compliance.

Banking
Where possible, please bank any cash you have on hand on 30 June. In fact, don't just do this at the end of the Financial Year, do this at the end of every quarter!

Close off your POS 
Many small business use a point of sale system which integrates with their accounting software and whilst best practice would be to close off at the end of every day, some smaller businesses may only do this weekly.

If you are one of those smaller business, set up a reminder to close off on 30 June. This way your sales figures are up to date to enable us to produce accurate reports which can be used for future decision making as well as tax purposes.

Stocktake
Like your POS, if you don't have a true picture of the stock you have on hand, you can't produce accurate information about the health of your business.

If you hold stock of any sort, do a physical count to establish the value of the stock at close of business on 30 June. If you manage your stock through an inventory system, you can use the system to produce a report of the stock you should have one hand. This can then be used to assist your count. 

Of course, no-one wants to spend hours after close of business on 30 June to count stock on shelves, so June is the month to run your stock levels down to make this an easier process. 

 

Saying hello to 2021-2022

As mentioned above, if you have staff, there are some important changes to be aware of:
  1. STP reporting for micro employers
  2. STP reporting for closely held employees
  3. Super Guarantee changes
  4. Wage increases
STP reporting for micro employers
You may remember when Single Touch Payroll (STP) was first introduced, there was the option for micro employers (employers of 4 or less staff) to report their STP obligations quarterly. This concession ends from 1st July so these employers must now report STP either on or before each pay event.

There are circumstances for some micro employers where they can continue to report quarterly, but they must meet certain eligibility criteria and have exceptional circumstances to do so. 

STP reporting for closely held employees
A closely held employee is one which is directly related to the entity from which they receive payment. This could be a family member, director or shareholder of a company or the beneficiaries of a trust.

From 1 July, payments received by these closely held employees must be reported in one of three ways:
  • The actual payments on or before each pay event as with other employees;
  • Actual payments reported quarterly when your activity statement is due; or
  • Report a reasonable estimate quarterly when your activity statement is due
In all circumstances, the correct amounts of PAYG withholding and superannuation contributions must be made by the usual quarterly due dates.

If your Accountant is currently adjusting your annual "drawings" or "Directors Loan" at the end of the year to account for a closely held employees wage, you will need to speak with them to work out how best to address this compliance issue. 

I will be in touch with clients who currently draw their wage from their business in this manner to discuss this with them and their accountant.

Superannuation Guarantee changes
Since the introduction of compulsory super in 1992, the employer's contribution increased from the initial 3% to 9% to 2013-2014 when the Rudd-Gillard Government passed legislation to increase the contributions gradually to 12% by 2019.

Whilst the first increase to 9.5% happened in 2015, the Abbot Government deferred the next rise for six year meaning that from 1 July 2021, the employer contribution will increase to 10%.

Please note, this rate increase will apply from the first pay period which is paid after 1 July 2021. If you are using one of the major accounting software packages, this change should be automatic. If you're not sure or just want to check, get in touch by sending me an email.

Wage increases
This is also the time of year for the annual wage increase announcements. To date, this has not yet happened, however, there have been some sources indicating it may again be a staggered increase similar to last year.

Watch this space...
 

NSW Government Rebate

The NSW Government have assisted small business with several one off payments in the last couple of years. Bushfire grants, COVID-19 grants, and flood assistance. 

Recently, they have announced a Small Business Fees and Charges rebate scheme to assist small business recover from the impacts of COVID-19. This scheme is open to sole traders, small business and not-for-profits in NSW and provides rebates for up to $1,500 of NSW and local government fees and charges.

Go to the Service NSW website for further information where you can apply online. 
 
Well, a longer than usual newsletter with a lot of information which I hope you find useful. Feel free to share this amongst your business friends and networks and as always, support your local business community and buy local...

Until next time...

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