End of Financial Year (EOFY) is a busy time for many people. As a business coach with a strong financial background, I strongly recommend you get a start on the year very shortly and action all the things you can well in advance. My philosophy has always been to be as organized and ready as possible for busy times, then it’s not so frantic.
End of financial year – what you need to do
Ensure you have strong systems and a plan
If you are a business which thrives at this time, then be organized and be ready. Especially for bookkeeping businesses, accounting firms, financial advisors, insurance brokers, you know this is a busier time. Have you got your marketing in place? Have all your staff been trained and updated on any changes or new procedures? Are your templates, forms and checklists current, up to date and ready? I cringe when I see businesses that have not planned and consequently have to knock back work now because they are too busy. For some industries, if you don’t take the work now, you will certainly be scrapping the ‘bottom of the barrel’ come Christmas time.
Tax Plan whilst you have time
Now is an exceptional time (once your March BAS is done) to consult with your accountant for tax planning purposes. The best tax planning occurs before 30 June. Once you pass 30 June there are options which will have been closed off to you now. Consequently, don’t leave your tax planning to a few days before 30 June. Get in now for optimum results.
If you are an accounting firm, have you educated your valued clients to come in and see you? Have you communicated with them all and invited them in for tax planning? I know some firms are in close contact with clients all year round, but others see clients less often, but now is absolutely the time to reach out. The worst thing you can do is assume they will just keep coming back … because I can assure you that your competition is marketing them. Don’t presume because they are your client now that they will be tomorrow.
Prepare for any necessary changes
Once you’ve done your tax planning it may be decided that you need to change the structure. This may be to legally minimize your tax or protect your assets. Quite often the change will occur between now and 30 June OR at 1st July. It just depends what the purpose of the change is. If you are being restructured (perhaps being moved from a sole trader to a company or trust) then the setup will need to be actioned, your invoice template updated with the new ABN (and name) as well as setting up a new MYOB, Xero or Quickbooks file. If you change entities, you cannot just continue in the same accounting file you had before. Each entity must have its own file. So if these changes are happening and you’re seeking the assistance of an MYOB, Xero or Quickbooks consultant, don’t wait until 30 June when they are flat out you need the file setup ‘today’.
I’m a big fan of budgets. You cannot change what you cannot manage and you cannot manage what you don’t know. Having a budget isn’t just about having a plan for profit, knowing your expenses and sticking to your allocated budget, it’s about focus. When we focus on something it’s more likely to happen. For example, you may need business cards for 3 staff but it’s not urgent. If you get them all now then you will exceed this month’s budget, although the next 2 months will likely be ok. If your printer is going to give you a nice little discount to do them all now, then great, proceed. However, if the cost is the same, then I’d be spreading them out and getting one batch per month in order to meet your budget. Additionally, if you check your budget 50% through the month and you see things are not going so well, you have enough time to work harder on increasing sales, or know you need to pull on the brakes with some spending. One comment though, if you are low on income, don’t pull the brakes on critical expenses like your marketing or business development – otherwise, the effect will just snowball and you’ll end up with even less income. Remember this, if you can’t get your finances working well on paper, in real life, it will never work!
Now is the time to spend
If you have necessary expenses coming up, then time these to occur before 30 June. Over the years I’d changed most of my insurances to all fall in May or June. If you’ve had a strong profit year, you may choose to prepay some items such as rent, telephone or subscriptions. Again, part of your tax planning may be having a discussion with your accountant about what is allowed. You may choose to bump the Directors’ super (subject to cap levels) or paying the staff super a few days before 30 June to get the deduction in this year. Remember for super to be deductible it must be in the hands of the fund by 30 June. Perhaps you are a trade and can stock up on some materials or consumables. Do your company vehicles need a service or new tires? Are you stocked up on stationery and printer cartridges? I’m not saying spend for the sake of spending, but certainly, if you know you’ll be paying these items in July or August, then pay them before 30 June and get the deduction in the current financial year rather than having to wait a whole year.
I’ve had a few nicknames over the years including Ms. Organized. I cannot recommend strongly enough the value of being organized and prepared. If you employ staff, are all their details in your accounting file up to date (address and TFN)? If your bookkeeping is behind then get it up to date, or get help. If you don’t know how to run off Payment Summaries, then learn now or get a consultant in to help you. Book them now so you don’t miss out. If you have to stocktake, ensure you have enough staff on board to action this. I know 30 June is a ways off yet, but I can assure you the time will fly and it will be upon us very soon.
Get a marketing plan in place now
If you don’t have a business plan or a marketing plan, then now is the time. Get the deduction in this year but more importantly, get a plan and action strategy in place to start the new financial year with zing and vigor. Gone are the days of just ‘winging it’ with a ‘hope and a prayer’. For business to be strong, sustainable and solid, you need to have a clear, concise and strong plan in place to make your business work. Every plan I work on with my coaching clients contains a number of elements, including being realistic, working to business and well diversified. Over the decades I’ve seen too many times where someone has all their eggs in one basket. Most marketing plans have a strong digital component to it, but sadly, some marketers these days forget about the non-digital component. I work with clients to find personalized, customized and sustainable solutions to take their business beyond today.
As a business coach, I work with clients in every aspect of their business, from ensuring the know-how to read their financial reports, to assisting with marketing plans, setting up great systems, implementing effective sales processes and everything in between. I work with clients on perception, confidence and positive attitude. If you’d like to know more about my coaching services or international workshops, check out www.donna-stone.com.au/services to learn more. All the very best for a spectacular and amazing New Financial Year!