Are you using your tax concessions effectively? Here are some simple things you can do.
1. Scan all your invoices
Keep track of receipts by implementing an invoice scanning app to ensure every single deduction is captured. This means small businesses can scrap spreadsheets and instead take a photo of the claim to be recorded.
2. Share files
Set up a shared online storage folder like Dropbox to store all bank statements, invoices, deductions, and contracts for your accountant.
Carefully name each file and drop these documents into a file that your accountant can easily access and inform them, which can save hours of meetings and emails requesting additional information to do their job. Downloading the ATO app on your phone will also help record receipts and log book activity for work-related travel.
3. Review stock and inventory
Set aside time before the end of the financial year to conduct a thorough stock audit to identify damaged or obsolete stock and write it off. Scheduling the time to take an inventory of stock and verifying quantities and the condition of each item will impact the value of the trading stock and also profit margins. It might be best to rope in a couple of helpers and start early in the morning, or at the end of the work day.
4. Hire a bookkeeper
Staying on top of bookkeeping throughout the year is the key to making tax time simpler.
The golden rule is that if you can’t substantiate it, you can’t claim it, so those businesses that aren’t organized often lose out on deductions.
Paying a professional bookkeeper can also mean that you have a better grasp on how your business is tracking and assess if there are financial problems so you can fix them quickly before they threaten your business.
5. Upgrade accounting software
One of the biggest game changers for SMEs in the past decade has been the development of cloud-based intelligent software to help businesses manage their financial data, invoicing, HR, payroll, and inventory in a one-stop shop.
Cloud software is also highly collaborative, which means clients can allow their business advisers and accountants to access and work on business records at the same time. It’s also great for compliance.
6. Streamline business operations
Look for tools that enable you to manage a number of core business functions all at once. Some of these can help a small business avoid high administration costs and avoid payment delays.
Small businesses often don’t have the resources to delegate one person to tax preparation, and the last thing you want to do is sift through a year’s worth of paper in the midnight hours just trying to get organized.
7. Schedule a planning session
With tax time behind you, schedule a time to sit down with your accountant for a planning session.
This gives you the chance to look forward to the coming year and assess the most profitable areas of your small business and make some decisions about key areas to focus on during the coming year.
Also, ask your accountant for tax-saving strategies and look for options to reduce tax and reset to make your business more profitable.
Don’t be stressed during tax time. We offer virtual consultations and you can get the Right Solution in the comfort of your home or office.
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