Start planning now for financial year end

There are less than two months before the end of the 2023 financial year. May is a good time to start planning for your year end strategies. It is a good time to gather your information and get your thinking cap on.

If you haven’t done so already, you should get your accounts up to date so that you have a reasonable picture of how the 2023 financial year will be for your business. At this time of the year, most business owners will be able to make a reasonable estimation of the profit (or loss) the business will make for the year.

With that information at hand, and with some help from your accountant, you should then engage in unhurried and considered planning for the financial year.

Tax

Planning for tax liabilities should be on your list and, if possible, planning to lessen those liabilities. Year end tax planning can include:

Accelerating deductions or delaying the recognition of income. [Remember that 100% write-off of assets is very likely to finish on 30 June 2023].
If you use a trust, planning for which beneficiaries will receive distributions and how much each beneficiary will receive (while taking account of the major changes to the way the ATO now administers trust taxation).
Ensuring any Division 7A loan repayments are made on time.
If you have a company, what dividends should be paid and when should they be declared.
Cash flow planning with regard to tax payments. If you have had a good financial year after a poorer one, you know that there is a big tax “hit” coming. Best to plan for it.

Business planning and budgeting

At this time of year many business owners take the time to “take stock” of their business and their lives. Where is the business going? What are the current goals? How have we gone at meeting those goals?

This is a good time to plan for the next financial year and this will inevitably involve a budgeting process of some degree. If there are new product plans or expansion plans, where is the money coming from to give effect to those plans?

How many employees do you need and what equipment do you need to achieve your goals. When will you start the process of acquiring what is required and how much money will need to be spent and when will it need to be spent?

Bank reporting and finance

If you have finance facilities in place, there is likely to be reporting requirements to the bank. Start planning for how those reports will be compiled and whether you need to make a further finance application or make some adjustments to your current facilities.

Superannuation

This is also a good time to make plans for discretionary superannuation contributions for the 2023 financial year. How much can you contribute? How much will be tax deductible and how much will be non-concessional (non-deductible) contributions?

To learn more or if you need assistance preparing for the end of the financial year, contact our team. We are here to help:

(03) 9374 8400

hello@mksgroup.com.au