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EOFY or the end of the financial year is the time when small businesses in Australia need to deal with their taxes. However, in 2020, this period posed numerous challenges thanks to the COVID-19 pandemic, and things look to be going on a similar course in 2021.
In this post, we’re going to take you through some handy tips that will help your Australian small business deal with the accounting and taxation challenges that lie ahead. So, without further ado, let’s get right into it!
The COVID-19 pandemic hasn’t only resulted in problems in healthcare and the economy – it’s also been the perfect breeding ground for a wide variety of cybersecurity attacks and email scams. Simply put, if you haven’t put measures in place to protect the data of your company, its customers, and its stakeholders, you should get to it without any further delays.
We recommend updating your software and using strong passwords for giving your system the protection it needs. You can also consider multi-factor authentication, which involves setting a combination of security checks. This ensures the prevention of unauthorized access to your business’ computer systems, online services, and applications. We recommend using MYOB or XERO, which are both online financial accounting software with a slew of helpful features.
The Australian Tax Office (ATO) has made things simpler for SMEs in light of the pandemic. For example, if you and/or your employees are working from home, you can claim 80 cents/hour to cover all your running expenses. This eliminates the need for going through complex calculations.
Both small businesses and employers can access helpful information that has been provided by the ATO. Some of the aspects that the ATO has focused on include:
The ATO has also provided a list of legitimate deductions for businessmen working from home, which includes:
Most Australian small businesses failed to meet their financial goals in 2020. Not much is going to be different in 2021, given that COVID-19 is still very much on the rampage around the world. In such a scenario, it’s important that you prioritize your mental health and don’t push yourself too hard to achieve the goals that you outlined in the budget 2021 for your business.
Apart from taking care of your own mental health, you should also encourage open and supportive communication among your employees, even if you are all working remotely. The Australian Government has put out some practical ways in which owners and employees of small businesses can access support for mental health issues.
According to the Government’s recommendations, mental health risks can be managed by identifying hazards, assessing and controlling risks, and continually reviewing control measures for ensuring effectiveness. You should also keep your stress levels in check and ask your employees to do the same by:
Simply put, today’s market is unprecedented, and this should be reflected in your forecasts and budgets. Take your financial advisor’s help and keep your financial statements updated, and don’t forget to reassess them periodically to keep track of accounts receivables.
Go into great detail regarding what the effects of the market are on your workforce and your business operations. If you feel you lack the intuition and foresight to predict the changes in this uncertain market, take the help of the COVID-19 Contingency Plan produced by CPA Australia. This plan is sure to give you a much clearer picture regarding the future of your small business in an uncertain market landscape.
Financial advisors are more important than ever before, and you should seek counsel from them to steer your business through this uncertain period. EOFY processes can be daunting, and if you want to tackle them yourself, it can impact your business’ productivity negatively.
That’s why if you don’t have a dedicated financial advisor for your business, it’s time you choose one. Thankfully, there are many experts out there who can help you out. While you will have to shell out more money to hire the services of a reputed financial advisor, you should consider it money that will be well spent in the long run.
Additional tips for EOFY for small businesses
So, now that we’ve taken you through the handiest tips for getting your SME prepared for EOFY, we hope that your business will be ready by the time June 30 comes around. To conclude this post, we’d like to wish your business and its entire workforce all the very best for the future.