The end of the financial year (EOFY) and tax time for small business can be challenging at the best of times. In the third and fourth quarters of 2020 in particular, most Australian small business owners have had to make significant and rapid adjustments to most areas of their businesses in light of the spread of COVID-19 and the risks posed to businesses and workforces as a result. Keep reading for 5 ways to make sure your business is ready for EOFY.
From researching and accessing JobKeeper payments and other subsidies, to maintaining positivity and supporting staff and co-workers as the workforce adjusts to working remotely, it’s been a stressful time for everyone. For teams, there’s been the additional stress of trying to perform their roles during a global pandemic, in many cases attending to caring for (and home schooling!) their children at the same time. While some businesses have been quick to pivot and take advantage of new opportunities that have arisen, for many, the pressure to adapt has been immense.
With June 30 looming, we look into some of the most important ways Australian SMEs can prepare – financially and emotionally – for EOFY 2020.
1. The Australian Tax Office is here to help
If you are working from home or have staff who are, the Australian Taxation Office (ATO) has announced that people can claim 80 cents per hour for all their running expenses, rather than needing to calculate costs for the specifics.
The ATO has made plenty of information and support available for businesses and employers, including boosting cash flow, instant asset write-off, the backing business incentive, and JobKeeper payments for your employees.
For anyone working from home, the ATO has said the following are legitimate deductions:
- Heating, cooling and lighting bills
- Costs of cleaning your home working area
- Depreciation of home office furniture and fittings
- Depreciation of office equipment and computers
- Costs of repairing home office equipment, furniture and furnishings
- Small capital items such as furniture and computer equipment costing less than $300 can be written off in full immediately (they don’t need to be depreciated)
- Computer consumables (like printer ink) and stationery
- Phone (mobile and/or landline) and internet expenses
2. Safety first – keep your data and IT systems secure
Unfortunately, the COVID-19 pandemic has been a breeding ground for email scams (phishing) and cybersecurity attacks. So to protect your company’s, customers’, and stakeholders’ precious data, it’s vital that your business is equipped with reliable data and software.
Keep your software updated, and use strong passwords to protect your system. Enabling multi-factor authentication is another essential safety precaution; having systems accessible by a combination of proofs (password, plus security key, plus fingerprint, for example) is an effective way to prevent unauthorised access to computers, applications and online services.
3. Take stock and reassess your financials
With the aid of your accountant, reassess and update your financial statements. You are operating in an unprecedented market, and your budgets and forecasts should reflect that.
Deep dive into all the ways in which your business operations and staff are being affected by the changes to how workplaces are operating. For those who have not already done so, CPA Australia has produced a useful COVID-19 Contingency Plan which will help you develop a clearer picture of how prepared your business is to navigate this landscape.
4. Put things into perspective
Don’t be too hard on yourself if you haven’t met, let alone smashed, your financial goals for 2020.
According to the Federal Government, “The impact of COVID-19 on small businesses is devastating and the toll it is taking on people’s mental health is serious.” To assist, the Government has published a list of practical ways for small business owners and staff to access mental health support during this difficult time.
It’s very important, as a business owner or manager, that you lead by example, and care for your own mental and emotional health first. Build a culture of open communication and support in your workplace (whether it’s remote or not), in which your co-workers and staff feel safe expressing themselves, and are encouraged to ask for or access help if they need it.
5. Lean on your business advisers
Thankfully, there are many skilled accounting and tax experts available to help guide you and your business through the often daunting EOFY processes and tax return lodgement. Engaging extra help may seem an expensive option, but – and this is especially true during periods of extreme stress such as that which we are experiencing in 2020 – very often it will be more cost effective to engage a professional, than muddle through on your own.
The Team at DGL Accountants are willing to spend time to really get to know you and your business, and understand your business’ unique goals and challenges. We are more interested in investing in a long-term relationship and outlook, than lodging a tidy return come June 30. Talk to us today, we look forward to working with you in the new financial year!
EOFY tips sourced here and from the Team at DGL.