The middle of the financial year is a great time to do a business health check and make sure you’re on track to meet your end of year goals.
Here are 6 steps you should be taking mid year to make sure you finish the year with success:
Do a thorough check of your cash flow records and renew your cash flow forecast for the coming months based on current data.
Assess your current systems, especially your inventory and invoicing systems to make sure they align with your projected cash flow needs.
Implement appropriate changes and train staff in new systems to improve cash flow.
If your business holds physical stock, do a mid-year stocktake to see whether you are meeting sales targets.
Review your projected sales targets for the coming months and ensure your inventory levels are matching your projected targets.
Make sure you are meeting all business tax obligations, including pay as you go (PAYG) and business activity statements (BAS). Ensure all records are up to date and backed up appropriately.
New and small businesses that are not currently registered for GST should check if they are approaching the threshold of $75,000 in gross income – or are likely to hit the threshold by the end of the financial year. You must register for GST within 21 days of exceeding the threshold.
Check that you are meeting your superannuation obligations for your employees, whether they are full-time, part-time or casual (and contractors if super is required for them).
You are required to make super contributions for any employee that you pay $450 before tax in a calendar month (this can be slightly different for certain awards). Currently, that is 10% of their ordinary time earnings.
For new employees, you are required to give them a choice of super funds. You need to keep written evidence that you offered a choice of super funds, as well as records of any contributions made. If they don’t provide you with a superannuation fund, you will need to request their stapled superannuation fund details from the ATO.
Whether retirement is close for you or still a long way off, it’s important to plan ahead to set yourself up for a comfortable retirement. Mid financial year is a good time to check up on your retirement plan and see if you’re on track to meet your goals.
You can often choose to make additional superannuation contributions for yourself (subject to limits) for retirement planning purposes. If you don’t have a super fund currently, you might consider a self managed super fund (SMSF) – be sure to consult with your Accountant or Financial Adviser in order to confirm this is the right option for you..
Review your retirement plan with a professional and set saving or investment goals for the rest of the year.
Effective record keeping throughout the year will make reporting and tax obligations at the end of the financial year much easier. Use the mid-year to ensure everything is up to date and in order.
Consider ways of improving or streamlining your record keeping. Automated software may help with reducing the time required and minimising human errors. Make sure you have a reliable back up system in place for all your records.
Need expert advice about managing your business finances successfully? Give the team at Lawrence Group a call on 08 9433 3288.