Is your small or medium-sized enterprise (SME) ready for the end of the fiscal year (EOFY)?
Wherever you are in your preparations, here’s a handy EOFY checklist – with recommendations to prepare your business for success in the new fiscal year.
SAP Concur has released a new EOFY checklist for Australian businesses to help them navigate their financial year-end (EOFY) activities.
The checklist is intended to provide recommendations and resources that businesses can use to make their EOFY process faster, smoother, and less costly.
We at Dynamic company strongly recommend that you consult your tax professional for the most up-to-date information that applies to your specific business, but the EOFY checklist below could be a great starting point for small business owners.
As international borders reopen and COVID-19 restrictions ease, Australian businesses are stepping up operations. Simultaneously, companies are under pressure to anticipate post-election regulatory changes while managing year-end (EOFY) processes.
In addition, reduced access to human resources as a result of COVID has increased pressure on companies to complete their EOFY declaration, which is particularly difficult given that the Australian Taxation Office (ATO) is increasingly looking in addition to record keeping, labor related expenses and capital gains from crypto assets, physical assets and stocks for the 2021-22 financial year.
According to SAP analysis, Australian businesses need to undertake three critical activities to prepare for the end of the 2021-22 financial year. These include evaluating record keeping activities, ensuring company information complies with applicable ATO regulations, and protecting the company from tax evasion.
Review record keeping tasks
Verify that your financial records directly reflect what the ATO needs in the first instance to reduce the time it takes to execute EOFY trades. When you start, manage, sell, change or close your business, you are legally required to keep records of all your tax and pension related transactions.
Specifically, all businesses need:
- a summary of income and expenses, including employee travel and expenses
- an inventory to show current assets
- goods and services tax (GST),
- superannuation and pay-as-you-go (PAYG) withholding tax statements for the full year
- any document containing details of any choice, election, estimate, determination or calculation you make for your company’s tax and pension affairs, including how the estimate, determination or calculation was made.
- Ensure financial information complies with applicable tax requirements
Amid the EOFY chaos, Australian businesses are particularly vulnerable to tax refunds or tax scams. From January to July 2021, for example, scammers stole more than $7.2 million in Australia by gaining access to home computers.
Businesses that rely on employees accessing corporate systems from home face considerable danger because of this. According to the Australian Competition and Consumer Commission (ACCC), the most common types of risk for Australian businesses at year-end are:
- False invoicing
- Malware and Ransomware
- Whaling and phishing
- Shopping online
To ensure your business is well prepared, inform all employees of the possibility of targeted scams during tax season and have a mechanism in place so that anyone who receives a tax-related email or text message can immediately report it to the finance team.
Examine the overall position of the company
EOFY is a great time to assess your organization’s financial situation and plan for the year ahead. This is particularly important as the digital world accelerates the pace of business and market developments in response to global events.
This is also the best time to reassess spending on certain products or services during the year. Using this strategy can be extremely helpful in identifying significant operational cost savings.
Fabian Calle, managing director of small and medium enterprises, SAP Concur Australia and New Zealand, noted that Australian businesses have been doing the tough stuff over the past few years with the combined impacts of sustained business disruptions caused by COVID-19. , continued market volatility, and flooding.
“Many organizations are doing their best to keep the doors open and ATO compliance is a necessary factor, even though company resources may be stretched at this time.
“The ATO’s increased control over record keeping, work-related expenses, income from rental property and capital gains means the EOFY 2022 process is likely to be longer and more complex for most organizations compared to to previous years. »
SAP Concur 2022 EOFY Checklist for Australian Businesses can be downloaded for free at https://www.concur.com.au/resource-centre/ebooks/end-financial-year-checklist-australian-businesses
Disclaimer: - does not provide tax, legal or accounting advice. This article has been prepared for informational purposes only by our contributor and should not be relied on solely for tax, legal, or accounting purposes.You are strongly encouraged to consult your advisors to determine how the information may relate to you or the specifics of your business.
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