This simple checklist will help you figure out what you should be doing to comply with your legal obligations and boost profitability next year.
Top EOFY Tips:
- Collaborate closely with an experienced accountant or bookkeeper – Set yourself up for success this year, sit down with an accountant or bookkeeper with direct experience in retail and review your finances. Also, take the opportunity to set your goals for the next financial year and look at ways you can implement or improve processes and utilise technology to simplify your accounts management and make it easier on yourself. Each year, many Australian businesses miss out on valuable tax deductions through not consulting a financial expert. It is worthwhile to sit down with a professional to go through what you might be entitled to.
- Employee payment summaries – You’ll need to produce payment summaries for employees that detail how much tax you’ve paid on their behalf. If you provide non-cash employee benefits such as a car, you’ll need to pay fringe benefit tax on their behalf.
- Superannuation contributions– Final contributions must be processed by 28 July, however if you want to claim a tax deduction, you’ll need to make sure it’s completed by 30 June.
- Streamline reconciliations and reduce fraud– Reconciliation is one of the ‘must-do’ jobs that every retailer should stay on top of all year round, not just at EOFY. Thanks to integrations between POS systems and accounting software such as MYOB and Xero, retailers can now automate parts of the reconciliation process and reduce time spent on data entry while boosting accuracy. To reduce fraudulent activities, it’s important to separate duties. Most often fraud is committed by someone trusted to do everything.
- Stocktake efficiently – If your business turnover is less than $10 million but the difference between your opening and closing stock level is more than $5,000 you’ll need to complete a stock count. It must to be completed as close to the EOFY as possible and include a list that describes each item and its value, who completed it, how and when it was completed and who valued the stock (and what their basis of valuation was). There are a whole host of stocktaking best practices you can follow to improve efficiency. Using a digital stocktaking process with mobile devices that feed data into your POS inventory management system will help you save time and reduce the risk of human error from paper-based counting and spreadsheets.
- Invest in New Assets and Instantly Write-Off– the federal government now allows eligible businesses to immediately write off asset purchases of up to $30,000. Take advantage of this scheme and look into a way you can do so before the end of the year. It covers non-physical assets like POS software and e-commerce sites. Investing in new technologies now can mean you can introduce new retail practices and sales channels into your business for the new financial year, laying strong foundations for growth. This is also the time of year to write-off bad debts and un-sellable inventory that’s obsolete, expired or damaged.
- Run a seasonal sale or promotion – EOFY is a great time to run a campaign and close out the current financial year with a revenue boost. If you retail to other businesses there is a clear opportunity to frame this around them spending any remaining budgets and / or taking advantage of the instant tax write off mentioned above. If you only sell to end consumers, you could frame this around liquidating excess stock (Stocktake Sale or Stock Run Out Sale) or just about wanting to finish your financial year strong. Align the rationale to your brand values. Plan your campaign carefully considering offers, messaging and media to target both existing and new customers. Offers do not have to necessarily involve discounting, they could be focused on gifts, free shipping, loyalty rewards or other incentives.
- Plan to get out the blocks fast in the new Financial Year – Many retailers have some of their weakest sales in the first few months of the new financial year. This is partly due to fatigue from closing out their EOFY duties and activities. Often no plans are made for these vital few months. The result is a lack of focus from both leadership and employees. A poor first quarter jeopardises achieving your full financial year targets. It is essential that you have a month-by-month plan for each of the key areas of business operations for each store / sales channel. These first few months of a new financial year are no exception. Now is the time to consider marketing campaigns, promotions or product launches you could execute in July that can help to engage consumers and give you a strong start out of the blocks.
Score your business in each of the critical areas of practice to identify strengths, weaknesses and potential blind spots.