End of the financial year (EOFY) can be a stressful time for businesses and individuals alike. However, with proper planning and organisation, it can also be an opportunity to streamline operations, maximise tax benefits and set the stage for a successful new financial year. Here is a comprehensive guide to help you gear up and prepare effectively for the EOFY.

 

Review Financial Statements and Records

Start by thoroughly reviewing your financial statements and records. Ensure that all transactions are accurately recorded and categorised both in your practice management system and your chosen accounting system. This includes:

  • Income Statements: Verify all revenue and expenses.
  • Balance Sheets: Check the accuracy of assets, liabilities and equity.
  • Cash Flow Statements: Ensure all cash inflows and outflows are recorded.

Reconcile Accounts

Reconcile your bank statements, credit card statements, and any other financial accounts. This helps in identifying any discrepancies and ensures that your practice records match your financial institution’s records.

Assess and Manage Receivables and Payables

  • Accounts Receivable: Follow up on any outstanding invoices/accounts to improve cash flow.
  • Accounts Payable: Pay off any outstanding bills to avoid penalties and take advantage of early payment discounts.

Inventory Check

Conduct a thorough inventory check. Ensure that all inventory is accurately accounted for and valued correctly. 

Update Payroll and Employee Records

Make sure all payroll records are up-to-date. Verify employee  and contractor information, and ensure all superannuation contributions and other employee benefits are accounted for. Prepare payment summaries or income statements for your employees.

Legal and Compliance Checks

Ensure that your practice complies with all legal and regulatory requirements. This includes:

  • Licences and Permits: Ensure all licences and permits are current.
  • Contracts and Agreements: Review and update any contracts and agreements necessary.
  • Ensure Service Agreements are current and up to date 

Evaluate Business Performance

Review your business performance over the past year. Analyse key performance indicators (KPIs) and assess whether you met your financial goals. Identify areas for improvement and set new targets for the upcoming year.

Review and Optimise Tax Position

  • Deductions and Credits: Ensure you have claimed all eligible deductions and credits. This might include office expenses, depreciation, and employee-related expenses.
  • Tax Planning: Engage with accountants, financial advisors, and tax professionals to ensure that you are fully compliant and to optimise your tax position. Their expertise can provide valuable insights and help you avoid costly mistakes. If you don’t already, we recommended partnering with a tax professional who specialises or knows the Allied Health space well.

Backup and Secure Financial Data

Before closing out the year, backup all financial data securely. Use both physical (external hard drives) and cloud-based solutions to ensure data redundancy. This safeguards against data loss due to technical failures or cyber threats.

Plan for Next Year’s Budget

Prepare a budget for the next financial year. Use insights from your performance review to make informed projections. Factor in any anticipated changes in income and expenses.

 

In conclusion, preparing for the end of the financial year doesn’t have to be daunting. By following these steps, you can ensure that your practice and financial records are accurate, your tax obligations are minimised, and your practice is well-positioned for the year ahead. Start early, stay organised, and seek professional advice to navigate the EOFY smoothly and effectively. By taking these proactive measures, you will not only meet your financial obligations, but also set the stage for continued growth and success in the new financial year!

 

Jenny