EOFY 2014: avoid last-minute pa­per­work blues

If you’re a start-up or small busi­ness op­er­a­tor ner­vously count­ing down to the end of the fi­nan­cial year (EOFY), take ac­tion now to help you avoid last-minute pa­per­work blues writes Tim Reed.

Business First - - CONTENTS - by Tim Reed

If you spent the fi­nal hours of last June tack­ling piles of pa­per­work, rec­on­cil­ing re­ceipts and clock­ing up rushed con­ver­sa­tions with your ac­coun­tant or book­keeper – there’s a much bet­ter way to bring in the new fi­nan­cial year.

Man­ag­ing a busi­ness can take up the ma­jor­ity of your wak­ing hours. It’s tempt­ing to de­lay the not so ex­cit­ing as­pects, such as book­keep­ing, un­til crunch time. Lack of prepa­ra­tion is one of the key rea­sons why many busi­ness own­ers and their loved ones dread the end of fi­nan­cial year.

With a lit­tle for­ward plan­ning, it’s pos­si­ble to avoid the stress of ne­go­ti­at­ing piles of pa­per­work and usher in the new fi­nan­cial year with con­fi­dence and clar­ity.

Here are five EOFY pa­per­work mis­takes that businesses fre­quently make that can cause eleventh-hour blues, and how to avoid them.

1. Not keep­ing de­tailed doc­u­men­ta­tion A com­mon mis­take is be­ing un­pre­pared. If ac­counts and records aren’t rec­on­ciled and up­dated reg­u­larly through­out the year, this can make the end of fi­nan­cial year pe­riod much harder than it needs to be. Miss­ing in­voices and re­ceipts can re­sult in large gaps in reporting, as well as lost time spent track­ing down mis­placed pa­per­work.

Us­ing rep­utable ac­count­ing soft­ware you or­gan­ise and track your fi­nan­cials, build a clearer pic­ture of your fi­nan­cial cir­cum­stances, and helps keep you com­pli­ant, too. A daily feed of bank trans­ac­tions, which comes straight into MYOB’s ac­count­ing so­lu­tions means keep­ing up to date with your ac­counts now takes a lot less time than in days gone by.

Pa­per­work that’s well or­gan­ised means fewer on­go­ing tax time tan­gles for you, your em­ploy­ees and your loved ones. It also frees up your time, so you can fo­cus on grow­ing your busi­ness and do­ing what you love.

2. In­ad­e­quate plan­ning and mon­i­tor­ing of cash flow Businesses of­ten fail to mon­i­tor in­com­ing and out­go­ing cash flow within a set time­frame – such as a fi­nan­cial year or a quar­ter – and are left with­out vi­tal funds to ser­vice their obli­ga­tions. Gen­er­ally, this is be­cause they don’t have the data to mon­i­tor and track their on­go­ing, fixed and vari­able costs, and ad-hoc ex­penses. Be­fore long, some businesses can find them­selves starved for cash and fac­ing se­ri­ous fi­nan­cial dif­fi­cul­ties.

To­gether with ad­vice from your pro­fes­sional ac­coun­tant and/or book­keeper, ac­count­ing soft­ware can help you bet­ter un­der­stand your busi­ness and man­age cash flow in real-time. It will track your ex­penses, pay­roll, in­ven­tory, es­ti­mate GST owed and more, so you can clearly see how your busi­ness is go­ing at any time. And if you use a cloud so­lu­tion such as MYOB Es­sen­tials, your sys­tem is al­ways up-to-date with your busi­ness bank bal­ances thanks to your trans­ac­tions be­ing au­to­mat­i­cally fed in from your bank.

3. Not keep­ing up with changes to tax com­pli­ance The end of fi­nan­cial year is also a time for businesses to pre­pare for the year ahead, which in­cludes be­ing aware of changes to tax com­pli­ance. The laws and reg­u­la­tions that ap­ply to run­ning a busi­ness change fre­quently so it’s im­por­tant to en­sure you’re up to date.

Stay­ing up to date with com­pli­ance changes can give busi­ness oper­a­tors a head start on the new fi­nan­cial year. An ac­count­ing so­lu­tion acts like a vir­tual as­sis­tant by au­tomat­ing many as­pects of your fi­nan­cial man­age­ment and lets you view your fi­nan­cial sit­u­a­tion in-depth or at a glance. Stay in touch with your ac­coun­tant, book­keeper or fi­nan­cial ad­vi­sor too.

4. Re­ly­ing on just a head-in-the-sand ap­proach to ac­count­ing

Some busi­ness oper­a­tors aren’t cut out for ac­count­ing. Re­gard­less of au­to­ma­tion, they’re bet­ter spend­ing time work­ing in and on the busi­ness than on the books. These businesses are best to work with a book­keeper or ac­coun­tant to get their books done for them. MYOB has a range of ac­cred­ited part­ners avail­able and ready to help. Many ac­coun­tants can sign the busi­ness up for MYOB Es­sen­tials or MYOB BankLink, a ser­vice that sends the businesses bank trans­ac­tions di­rectly to the ac­coun­tant, min­imis­ing the amount of paper records the busi­ness owner needs to pro­vide.

5. Leav­ing tax pa­per­work un­til the last minute

Some businesses don’t take a long-term ap­proach to their tax, leav­ing them un­able to fore­cast or make ac­cu­rate, in­formed de­ci­sions about their busi­ness. These lim­i­ta­tions can im­pact a busi­ness for years to come.

Main­tain­ing a close work­ing re­la­tion­ship with your ac­coun­tant, book­keeper and/or fi­nan­cial plan­ner, and us­ing an ac­count­ing so­lu­tion makes it eas­ier to stay on top of tax and end-of-year fi­nan­cial re­quire­ments. Put away that shoe­box, re­tire other time-con­sum­ing sys­tems and start tak­ing ad­van­tage of ac­count­ing soft­ware to stream­line your pro­cesses, get bet­ter reporting and in­sights, and en­sure you are com­pli­ant.

It’s never too early to get or­gan­ised so you can spend less time on pa­per­work. It means less stress for you, your em­ploy­ees and your loved ones, and more time for grow­ing the busi­ness and en­joy­ing life out­side work Visit http://myob.com.au/EOFY for a sum­mary of ma­jor tax changes, help­ful tips, re­sources and more.

Tim Reed is the chief ex­ec­u­tive of­fi­cer of Aus­tralia’s largest busi­ness man­age­ment so­lu­tions provider, MYOB. He de­vel­ops and drives the busi­ness’ strate­gic de­vel­op­ment, in­clud­ing its ex­pan­sion into on­line busi­ness man­age­ment so­lu­tions.

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