|Step 1 Reconcile your receivables
This involves chasing customers for any outstanding payments. If you are unable to recover some debts, you will need to write them off as bad debts. You will then be able to claim a tax deduction.Step 2 Consider your inventory
Can you write off or write down the value of any stock? Can any of your investments be sold to offset losses or have any other positive impact at tax time?
Step 3 Pre-pay for services and supplies
This strategy allows business owners to be able to claim a tax deduction. Bringing forward tax deductible expenses and deferring income can work to reduce your taxable income for the financial year.
Step 4 Superannuation
Make sure you are on top of your superannuation obligations. You will receive a deduction for all employee superannuation obligations that you pay. Super is a very tax-effective method of investing so you may want to look at investing your personal assets in super.
Step 5 Plan for the future
EOFY is the perfect time to plan for the future. You should aim to develop realistic profit and loss forecasts for the next year and set business goals for the next five and ten years. You should also look at your insurances and risk management plan to ensure that you are protected against all risks facing your business.
Step 6 Business Succession Plan
If you have a business partnership or a team of staff, you should consider developing a business succession plan. For example, a buy/sell agreement ensures a smooth ownership transition in the future.