If your inbox is anything like ours right now, emails spruiking EOFY discounts, mid-year promotions and stocktake clearances are piling up by the dozen. And with a new financial year around the corner, it’s no surprise that retailers are cleaning house in preparation. So if you’re looking to do the same (and tackle tax time while you’re at it), below are a few simple tips to consider ahead of the ‘23 year-end.
Hire a tax pro to save yourself time and money
Every small business owner needs a helping hand at tax time – especially retailers – who are notorious for wearing many hats. This doesn’t mean you need to employ a full-time advisor; sometimes, just a few hours of their time will be enough.
Like many entrepreneurs looking to save money, you may think you can’t afford an accountant or bookkeeper. But if you get an advisor to take care of time-consuming tasks, like tax, it’ll likely cost less per hour than what you would pay yourself. More importantly, they can give you plenty of great advice about running your business (beyond just meeting your compliance needs).
To find an accountant or bookkeeper who’s the right fit for your business, be sure to have a look at Xero’s Advisor Directory, using the filters to explore by industry or location.
Complete an inventory stocktake sooner rather than later
This year, take some time to plan the year-end stocktake, as it can be a long, tedious job. And as a retailer, it’s imperative to get it right. There are plenty of tips about completing a stocktake, but the main thing to remember is that the process should be organised and systematic, and you should come away with crystal clear records (in other words, don’t do rough estimates).
Keep a lookout for stock that’s slow-moving, damaged, obsolete or out of date. Why? Because if the value of your stock moves up or down during the year, it can affect your taxable income. There are a few options for how you can value inventory, so chat with your advisor about what’s right for your business.
Speak to your advisor about small business write-offs
If you’ve been thinking about purchasing a large asset, like a company vehicle or business-related piece of machinery, the ATO allows an immediate deduction for the cost of business assets used or installed for use before year-end.
The deduction is only allowed for the business portion of use. These are generous deductions, but keep in mind that you still need to find the cash to pay for the asset, and it may take several months before seeing a tax benefit from the deduction.
The Federal Government has been altering the tax concessions for business asset purchases over the last few years, so check in with your advisor for more information.
Get your staff and payroll admin under control
Of course, small business owners in the retail space spend a lot of time organising staff rosters and payroll. So before starting the new financial year, do yourself a favour and take a look at some employee management apps, like Planday. This powerful, cost-effective tool can help you manage rosters, time-clock attendance, leave, award interpretation, payroll integration and more.
Whether this is your first EOFY or you’ve been around the block a few times, winter needn’t signal tax time woes for your small business. With the right guidance, planning and foresight, FY24 is yours for the taking.
Looking for more year-end tips? Visit Xero’s EOFY Resource Hub today.