If you’re like most small business owners, you’ll have just powered through the dreaded end of financial year – filing tax returns, business activity statements and everything in between. In true crunch time fashion, most people leave everything until the last minute, taking time and resources away from what’s really important: running their business.
The new financial year is the time to turn over a new leaf and set yourself up to be more organised in the year ahead. Her are the new financial year resolutions I think every small business owner should make and stick to this year.
1. Don’t wait for the panic to set in…start now!
Making a record of your transactions when they happen is a huge time saver when the end of financial year creeps up.
For example, by sending mobile invoices through Invoice2go, you will be able to automatically save and organise them in one place.
The Receipts2go feature allows you to take photos of your receipts on the spot, save an electronic copy, and generate expense reports to summarise the information.
With so many great tech tools at your disposal, there’s really no excuse for the last minute search for paperwork you’ve filed away throughout the year. Even for time and resource-poor small businesses, being organised has never been so easy.
2. Separate your spending
The business is yours, you’ve dedicated your life to it and poured your heart and soul into it. Despite that, physically separating it from your day-to-day life is as important for your mental wellbeing as it is for your finances.
Open a standalone business bank account and be strict about how you use it. When you’re busy, it can be tempting to spend business money and think you’ll sort it out later. Keeping this strictly separate makes financial reporting so much cleaner and easier.
If all else fails, try to imagine yourself as an employee of the business – that way you’re far less likely to be able to justify the personal spending using business money.
3. Embrace the cloud
There’s nothing worse than realising important documents are missing come tax time.
Cloud-based technology should be every small business owner’s best friend. Among the many benefits of using cloud solutions, such as Google Drive and Dropbox, is that they ensure all of your data and documents are safe, backed up and accessible from anywhere.
In today’s “always on” business environment, having instant access to files throughout the day can also be a huge time saver. Reduce the amount of time you spend at your desk, uploading, downloading and creating files by doing it on the move.
4. Understand your tax entitlements
For businesses with an annual turnover of less than $2 million per year, which is around 2 million small businesses in Australia, the government recently announced a package of tax cuts that will come into effect next year.
Now’s the time to get your head around it all and understand how you can take full advantage of the new rules:
- 5 per cent tax cut for companies – If your business is a company, you’ll get a tax cut of 1.5 percentage points from 1 July 2015.
- 5 per cent tax discount for other businesses – If your business is not a company, you’ll get a 5 per cent tax discount from 1 July 2015.
- Asset deductions – You’ll be able to immediately depreciate any eligible asset costing less than $20,000 which you buy from 12 May 2015 until 30 June 2017.
You can find further details of new tax cuts, as well as other red-tape-reducing measures that the Government plans to introduce on the Australian Government website here.
5. Use valuable information to learn and grow
Why wait until the end of the year to reflect on the feedback you receive every day?
What many small business owners don’t think about is the goldmine of information that they are sitting on. Every time you engage with a customer you gather data.
Using online survey tools such as SurveyMonkey, it’s really simple to find out what your customers think. Use that information to shape your services to match exactly what your customers are looking for.
No business owner likes the end of financial year tax crunch. Investing the time and energy now to get organised for the year ahead will save you time, money and a lot of stress in the long run.
Chris Strode is the founder of Invoice2go, an invoicing software app that is one of the few Australian apps being included on the Apple Watch. More than one million invoices are now created globally per month by Invoice2go customers.