As the end of financial year quickly approaches, the stress levels among small business owners are on the rise, according to a survey conducted by accounting software provider Xero.
Of the more than 500 small businesses surveyed, one in five businesses said they lodge their tax returns late and another 10 percent said they run out of time.
Two thirds of the business owners surveyed said they find tax time daunting, with 58% of those surveyed saying the amount of time it takes them to manage their tax obligations at this time of the year causes stress.
Stress was nominated as one of key reasons why 45% of the surveyed business owners put off doing their taxes, along with a lack of time and resources.
Stacey Price from Healthy Business Finances told SmartCompany there is an easy way to reduce stress when it comes to tax time.
“People leave it really late, you should not start planning your tax on the 30th of June,” Price says.
Getting in early and sorting out your taxes will result in a lot less to do when it comes to tax time, with Price saying that business owners should “make your appointments early”.
A general lack of financial literacy was also uncovered by the survey, with 40% of small business owners reporting they are unsure of what they can and can’t claim on tax.
“Business owners may have great business ideas, but they hate numbers, they’re always the last thing they do,” Price says.
“When it comes to the end of the financial year, its not just the last few weeks they have to look at, it’s the whole 12 months of their business.
“They’re dealing with 12 months of numbers, and they’re doing a task they hate.”
The Xero also asked business operators if they were planning to take advantage of the $20,000 immediate asset deduction, finding that 60% of businesses planned to use the deduction this financial year.
However, only 46% had done so at the time of the survey.
A third of business owners were understandably unwelcoming of tax time, claiming it takes away valuable time in which they could be running and growing their business.
When asked what could be improved when it comes to tax time, half of the businesses surveyed said they would like to see government compliance requirements made easier.
Trent Innes, managing director of Xero Australia, said in a statement the survey findings show “small businesses are still being caught up in red tape”.
“The government could do more to make compliance easier for Australian small businesses, which ultimately, will save them the time they need to invest back into their business,” Innes said.
As to what businesses can do now, two weeks out from the end of the current financial year, Price says that it’s not too late to find an advisor.
“If you get them on your team now, they can help out right away and throughout the next financial year,” she says.
“That means if something does come up over the next 12 months you can give them a call and bounce things off them.”