Not just to make sure you’re complying with Tax Office requirements in submitting a return, but to make sure your business is as financially healthy and as efficient as possible.
Let’s start with the tax return, though. Are you maximising it? Know what items you may be able to claim as a deduction, make sure you’ve met your superannuation requirements, understand how government initiatives like JobKeeper might impact your tax situation, and write off any bad debts. (According to a recent report by Westpac, if you’ve paid GST on an accrual basis, you can claim back the tax you’ve already paid on a bad debt. That’s worth looking into, if you’re affected.)
Don’t forget, eligible businesses with turnover up to $5 billion may be able to write off the entire cost of eligible new assets, and those with up to $50 million in annual turnover are also potentially able to fully expense eligible second-hand assets.
But don’t just stop looking at your accounts once you’ve completed your statutory requirements to the Tax Office. While you’ve got your books open, it’s a great opportunity for a general financial health check. How are you tracking against your short-term and long-term money plan and other business goals? Do you have enough funds in reserve to pay for emergencies or planned improvements? Are you covering your overheads? Are you optimising your margins on parts? Are you operating efficiently? What changes could you introduce that could revolutionise your business and the state of your accounts? There is plenty that can be done.
It was pleasing to see in last year’s State of the Nation report, for example, that more Members are now measuring their efficiency using software. It’s leading to better service time estimates, and greater profit margins. Adopting this kind of technology is a huge driver of productivity gains for small businesses. Could it be exactly what your workshop needs?
You don’t have to be a financial whiz-kid to succeed in business, but it never hurts to know how to manage your money better. A basic understanding of the key concepts of financial accounting can help you improve your business. If you don’t have that already, there are a lot of resources available, so don’t be frightened to ask for help if you need it.
No-one ever regretted discovering new ways to make the most of their finances. Tax time is as good a time as any for a financial check-up.
Capricorn Group CEO
The information in this article is provided as general information only and does not take into account your individual circumstances. This article does not, nor is it intended to, constitute legal, financial or other independent professional advice. Please consult your professional adviser before relying on any information contained herein.