The end of the 2019/2020 financial year is fast approaching. If you’re a small business owner, there’s a good chance you’re feeling a little overwhelmed by everything that needs to be finalised and completed before the end of June. If that’s you, don’t fret – we’ve got you covered! This blog will run you through every document you need to organise and task you should complete before this financial year ends.
Keep reading to learn more!
1. Complete a Profit and Loss Statement
A profit and loss statement, also known as an income statement, is a list of all of the sales made and expenses accrued in a set time period – usually a month, quarter, or year.
By completing a profit and loss statement at the end of a financial year, you will be able to clearly see the amount of money your business gained or lost throughout that year. A profit and loss statement will also show you what your most profitable business activities were, as well as those that cost you the most money.
2. Gather your Bank Statements
If you choose to lodge your tax return with the help of a registered taxation professional, you will need to provide them with a copy of your company’s bank statements. These statements must include the total amount of interest you received or paid, the purpose of each transaction, and the total closing balance of each account as of the 30th of June.
3. Ensure you Have Met Superannuation Requirements
If your country requires compulsory contribution to your employees’ superannuation or pension fund, the end of the financial year is a great time to ensure you are fulfilling your requirements. Countries including Australia require you to keep a record of the superannuation you have paid, and in some cases, evidence that you provided employees with a choice of super funds.
4. Compile a List of Business Assets and Calculate their Depreciation Value
When preparing to lodge your tax return, you will need to put together a list of all the assets your business owns, as well as any improvements or repairs your business has made to them. Whether you lodge your tax forms yourself or with the help of an accountant, you will need to use this list to calculate the depreciation of your assets.
Depreciation should be included in your tax return as a cost as part of your profit and loss statement. This will ensure that taxable income you report, and therefore your tax bill, is not higher than it should be.
5. Renew and Adapt your Marketing Plan
Think about the marketing strategies you implemented over the past financial year, and whether they helped you to achieve business and marketing goals. If they didn’t, or you think they could be improved upon, think about the new strategies you would like to implement in the new year.
Adapt your marketing plan to the interests of your target market, the economic environment in your chosen market, and the strategies that have and have not worked for you in the past. Think about the types of media your target market consumes, or the locations they frequently visit, and market to them there.
6. Back up Paper Records with Digital Copies
This one might seem like a no-brainer, but trust us – ensuring you have multiple copies of your records is extremely important! If your paper records are lost or damaged, a digital backup could save your bacon if you need to access them or your business is audited. Be sure to save digital copies in multiple locations, including on an external hard drive or a secure cloud service, so you still have copies if you lose access to your primary computer.
7. Lodge your Tax Return
Once you have written the required documents and planned for the new financial year, it’s time to lodge your tax return. The due date for lodging tax forms is not the same in every country, or for all types of businesses or sole traders. Ensure you are aware of the correct date for your jurisdiction and business type, so you don’t miss that all-important deadline! You may prefer to lodge your tax return through a registered tax agent.
If you have bookkeeping experience, in many jurisdictions it is also possible to lodge them yourself by mail or through online government-run portals. As well as being convenient, lodging your own tax returns is a great way to save money on accountancy fees!
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