Head of Bookkeeping, Xero
Founder, The Revolutionary Firm
Why all the fuss over 30 June? Who needs it? Who wants to do that stuff anyway? As business owners we have better things to do!
I hear you. And just so you know, I happen to be an escaped accountant as well as an owner of several business ventures over the years.
So let's get real. I’m going to break it down and share my views. But this piece is not another top 10 tips to make the end of the financial year easy. There are enough of those out there to fill many shoeboxes!
Just another day
June 30 is really just another day: we still have to run our business, make sales, manage people, ensure customer happiness, but we also know that there’s that dreaded tax stuff that just has to be done.
But it’s quite an annoyance and something we don’t really want to have to put effort and energy into. More often than not, we don’t pay much attention to it from day to day. We leave it to after the fact and have our accountants shake their heads and charge us high fees to come up with figures about the past that are often no longer relevant – our focus is on today and tomorrow. But the law says we have to comply. And the worst thing about this is getting the bill at the end of it all. It just isn’t fun.
Compliance. Yes – that word.
As business owners, we’ve probably all experienced the infamous scenario described by Michael Gerber of having an entrepreneurial spurt. What entrepreneurs often forget is that we need to attend to the details to create the foundation of the businesses we are so passionate about. Compliance is the legislative requirement, but the more valuable result of having things in order is having the data that informs us about what’s really happening in the business.
But having that data in front of you just once a year isn’t that great. The key is to have data that’s right up-to-date. Looking at something in the past is some help. But it doesn’t help enough when we have to make decisions in the present.
So how do we break the 30 June pain and shake off the chains of compliance?
I have the solution! But first let's have a look at some of the things that we have to do as business owners in Australia around this time.
Get your stuff together
For 30 June, we do have some things that we need to do to get organised and make sure we keep the tax man happy. Recently on a flight to Los Angeles, I watched the ‘Hoges’ mini-series based on the Paul Hogan story, and his opening comic stint on Channel 7 from back in the early 1970s. His first-ever show told how to get your tax return back quickly – by attaching a tenner (a $10 note) to the filled-out form. It caused such a stir that he had reporters and tax office officials turning up on his doorstep.
I’m not going to tell you to clip a tenner to your income tax return, but what I share with you now will help, and you can use that tenner for a well-earned beverage at your local after you’ve got everything sussed.
The key to being ready for 30 June is really around getting your paper organised. And what I mean is don’t have paper. Instead, use Xero to store papers online so you don’t need to keep piles of random receipts, boxes full of bank statements, or files full of contracts. They can all be stored electronically in Xero, for reference this year and in the future.
If you have employees, your payroll needs to be in order so you can distribute annual payment summaries by 14 July. If you’re using Xero, then you don’t have to print or send anything: employees can access their payment summaries via the employee portal once you’ve published them. There’s a theme here – no paper…
You’ll also need to ensure that any super guarantee contributions (SGCs) are paid by 30 June so you can claim them and an income tax deduction in that year. And don’t forget yourself. Often business owners make sure all the boxes are ticked for their employees, but don’t look after themselves – we need to have something stashed away for retirement too!
If you’re selling product, counting inventory is the task we all anticipate with horror – but it needs to be done. It’s easiest if you do rolling stocktakes throughout the year, delegating the job to your team if you can. But if it’s a mammoth affair, order in the pizzas, crack open the beer, and make stocktaking an occasion!
How not to worry about it all
If all this sounds like too much of a headache, then the simple answer is that you actually don’t need to trouble yourself with it – get help.
Remember when you had that entrepreneurial spurt and you were going to change the world with the solution your business provides, then FOCUS on delivering that! This is what your purpose and passion is, so go do it.
When we start our business, we need to surround ourselves with people that can support us in the areas that we aren’t strong in, or that take us away from our focus. Even when I was an accountant, I made the mistake of hanging onto the accounting in several of my business ventures, and it was the worst mistake I could have made – I always put it last – I always felt there were other things I could be doing. I was right, there are. So outsource the stuff that takes you away from your main purpose.
In Australia, we have over 140,000 Xero advisors globally – accountants and bookkeepers whose sole reason for being is to remove the worry and help business owners with the essential compliance stuff. More importantly, Xero advisors can help keep the books up-to-date and use that information to assist with making informed business decisions. Now that’s powerful.
Solve the pain with a real remedy, not a band-aid
June 30 doesn’t have to be all heartache; it can be a normal day for you, or a time when you celebrate with your team. You could have a financial New Year’s Eve celebration like others in the accounting community – and who doesn’t want an excuse to have another new year to celebrate!
So my message is, get some help – connect with a Xero advisor. You’ll find one that suits your style in your area in the advisor directory.
Once you have done that, it’ll be time to spend that tenner at the local and say hello to a new year in business feeling lightened and invigorated. As Hoges would say, “Gidday viewers”.