Fiscal year 2020 is underway, but it isn’t too late to spruce up your financials for the coming financial year. Here are five tips to help your business finances rocket to the top.
1. Plan your asset write-off carefully
Since the Government has increased the instant asset write-off threshold to $30,000 for the fiscal year ending on 30 June 2020, you have plenty of time to think over what you need. Be sure to plan to stay under that $30K cap, though, because otherwise, you’ll have to take your deductions over time through the small business pool.
Make sure that the asset that you plan to buy fits within your overall business strategy. Buying a piece of equipment or another asset that doesn’t dovetail with your strategy can throw you off your game if it takes you down the wrong road.
2. Think carefully about new hires
With the Fair Work Ombudsman’s crackdown on underpaying employees, you need to go over every new hire with a fine-tooth comb. As SmartCompany.au points out, when you hire a staff member that doesn’t produce the standards you expect, you still must pay them fairly.
Therefore, you need to make sure your new employees have the experience, innovation, work record, and references that indicate they’ll pay off in the long run. Once you do hire, equip them with all the training they need to succeed.
3. Document your expenses
One of the other areas that have caught the ATO’s watchful eye is expenses. With too many businesses getting away with questionable expenses, you can expect them to keep careful track of your business transactions.
Make sure that those expenses are 1) truly deductible, and 2) well-documented. Otherwise, you might be in for a bumpy ride come tax time next year.
4. Take advantage of start-up tax breaks
If you plan to start a business this year—or start another business, the ATO allows you to deduct many of the costs that you incur when you establish your business. They include:
- Fees you incur when you borrow seed money
- ASIC registration fee and other Government fees
- Start-up advisory fees from business finance strategists, lawyers, and accountants
5. Keep records of bad debts
Some small businesses, especially healthcare organisations and other care-oriented businesses, might feel a twinge of guilt for pressing people to pay up. That kind of emotional attachment can lead businesses to avoid keeping good records, documenting each time they ask their patient or customer to pay.
Keeping accurate records of bad debts, however, can net you some significant tax deductions. If guilt is standing in your way, donate that portion of your refund to charity—also tax-deductible. That’s a win whichever way you look at it.
When you practice prudent financial strategies all year round, tax time won’t be such a challenge.
To learn more about getting your business off on the right financial foot during the coming year, contact the knowledgeable financial strategists at Strategic Specialists today!