Ask any business owner, and they’ll no doubt tell you that running a small business is a highly emotional experience. From the joy and pride of starting up, to the pleasure and pain of working with family and friends, and the often relentless pressure of running the show day to day – it’s nothing short of a roller coaster. As we arrive at the End of the Financial Year, it’s only natural that these emotions come into sharp focus. However, as revealed in Xero’s EOFY research, this time of year doesn’t have to be a negative experience. Far from it. Indeed, for many small business owners, tax season is a time for reflection and refreshing their outlook for the new financial year ahead.
Welcoming the time to review and reflect on the year that was
Our research found that when it comes to EOFY, small businesses have a mostly positive outlook, with the most prevalent emotions being pride (43.4 percent) and joy (20.8 percent). Only one in eight cited feelings of panic. Rather than succumb to worry as popular opinion might suggest, 81 percent of business owners instead view tax time as an opportunity to gain a thorough understanding of how their business is performing. The majority appreciated the incentive to take stock of any achievements or obstacles faced, and a further 78 percent took the chance to review whether business objectives have been achieved in the past financial year.
However, if you find yourself feeling stressed about all of the paperwork that traditionally comes hand in hand with this time of year – rest assured that you’re not alone. Almost half (47.1 percent) of the small business owners polled said that EOFY was one of the more stressful aspects of running a business – almost as anxiety inducing as finding new clients/customers (48.8 percent) or deciding whether to expand the business (43.4 percent).
Taking the opportunity to de-stress and seek professional advice
Instead of letting the stress take over, here at Xero we recommend seeing it as a timely reminder to book an appointment with a registered BAS or tax agent. Our research showed that the vast majority of business owners (88.8 percent) either seek or plan to seek support with their annual reporting from a qualified accountant or bookkeeper. Among those who do so, most say it is because they feel more confident that everything is in order as a result (70.2%).
The research polled many small businesses – from veterans to startups, young to old – and their perspectives on how to approach tax time resulted in a range of helpful tips.
Five tips on getting through EOFY with a spring in your step:
1. Reframe your thinking by viewing tax time as an opportunity to truly take stock of how your business is performing. Three quarters of the small business owners polled embrace the incentive to reflect on any achievements or obstacles faced.
2. It pays to get organised on all things EOFY. Three in five small business owners said having systems and processes in place helped them feel in control of the business.
3. Reach out to a qualified accountant or bookkeeper for your annual business tax reporting. This was the avenue turned to by 88.8% of business owners as a way to manage EOFY stress.
4. Use your accountant as a source of support. The research revealed 78.3% found their relationship with their accountant was the most valuable source of support in running their business.
5. Lastly, remember why you started your small business in the first place. Of the business owners who said they felt they were losing control of their business, more than half (59.4%) said getting clarity on the business’ direction helped them regain control.