How SMEs can embrace good habits this new financial year

Tax time new financial year

As we enter a new financial year, small businesses might initially put tax and financial management on the back burner after the EOFY. However, these are not normal times. Australia is experiencing interest rates rising again in July for the third month in a row, rising minimum wage, inflation, soaring energy and fuel prices, staff shortages, supply chain issues and the cost of living rising.

Small business owners have faced several challenges in the last few years, and their resilience, aided by the partnership of their trusted advisor, is commendable.

The new financial year is a perfect opportunity to get into good habits so you can set your business up to flourish.

Year-round strategic advice and planning

To help future-proof their businesses in this new landscape, SMEs can engage an accountant or bookkeeper to plan their year and budget for all the potential variables. This will help keep businesses in the black and map out opportunities to save money, drive sales or seek assistance.

SMEs often say their advisors are a lifeline, especially throughout the pandemic.

Business owners also reveal that they would have struggled to keep going without their advisors, and many leaned on their advisors for emotional support, as well as guidance for their business.

Advisors will keep you up-to-date with the constantly changing legislation and other updates, such as the ATO’s increased work-related vehicle deductions, so that you are informed and working to the latest guidelines.

Digitisation to improve your business

Digitising your business and using cloud accounting software can help you save valuable time and stress, as well as give you important analysis, reminders and records.

For example, you can use software to track your mileage on-the-go, upload receipts automatically through an app, see a dashboard of your finances and receive notifications on your phone to remind you to chase payments.

When you’re digitising your business or investing in skills and training, you might be able to deduct a further 20% thanks to the Small Business Technology Investment Boost and Small Business Skills and Training Boost, if the Labor government adopts this policy.

Digital tools can also help maximise your tax deductions as you will get in a good habit of logging everything. It also helps lower the likelihood of mistakes and lost files before it’s time to do your tax return. This helps transform tax time into a seamless experience.

STP Phase 2 will keep you compliant

In January, the ATO rolled out Single Touch Payroll (STP) Phase 2 and is starting to contact businesses to ensure they’re making the transition. Therefore, one important habit you will need this year is compliance with  STP.

STP allows payroll information, including wages, PAYG and superannuation to be reported digitally to the ATO each time your business pays its employees. STP saves you time, allowing you to get back to what you love doing.

These are some helpful new financial year resolutions for small businesses to pick up to ensure they have a prosperous year. By working with a trusted advisor, you can plan for pitfalls, gain the most up-to-date knowledge and take advantage of the available support.

Digitising your business and investing in new digital skills can help you ensure your business remains competitive, is secure and can help maximise profits. Advisors will also keep you compliant with STP 2.0, saving you time on payroll. I hope SMEs will lean on the experts, digital tools and the available support to help have a manageable financial year 2023.

Shaye Thyer is head of accounting at Intuit QuickBooks Australia. 

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