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 consider what you need. Be sure to stay under that $30K cap, otherwise you’ll need to take your deductions over time through the small business pool.
Make sure the asset you plan to buy aligns with your overall business strategy. Buying equipment that doesn’t dovetail with your direction can derail momentum and pull you off course.
2. Think carefully about new hires
With the Fair Work Ombudsman’s crackdown on underpaying employees, you need to scrutinise every new hire. As SmartCompany.au points out, when you hire someone who doesn’t perform to expectation, you still must pay them fairly.
Make sure your new employees have the experience, work record, mindset, and references that indicate long-term value. Once you hire, give them the training they need to succeed.
3. Document your expenses
The ATO is closely monitoring business expenses. With too many businesses claiming questionable deductions, you can expect increased scrutiny.
Make sure your expenses are truly deductible, and ensure every one is well-documented. Otherwise, next tax season may get rough.
4. Take advantage of start-up tax breaks
If you plan to start a business this year—or launch a second business—the ATO allows you to deduct many of the costs incurred when establishing your operations. These can include:
- Fees incurred when borrowing seed capital
- ASIC registration fees and other Government charges
- Start-up advisory fees from business finance strategists, lawyers, and accountants
5. Keep records of bad debts
Some small businesses, especially healthcare and care-oriented organisations, feel guilty about chasing payments. That hesitation often leads to poor documentation of repeated attempts to recover payment.
Accurate records of bad debts can deliver significant tax deductions. If guilt is the barrier, donate that portion of your refund to charity—also tax-deductible. Either way, you win.
When you practise prudent financial strategies year-round, tax time becomes far less intimidating.
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!
