Although it might not first appear obvious, May can be one of the busiest months of the year for businesses. Not only has ‘regular’ business resumed, but many business owners are forced to ask and answer some tough questions they might have been avoiding.

When this time of year comes round, businesses and employers often feel a sense of panic and overwhelming stress. It’s the month where everything builds up – invoicing, checks with accountants to ensure everything is accounted for in the correct year to maximise tax deductions, clients and suppliers want paperwork and reports; all the nitty gritty tasks that need to be done before the end of financial year.

But on the positive side, May is the perfect time of year to prepare your business for the financial year ahead. Although it’s vital that you (or your book-keeper) prepare your books for tax purposes (to ensure your business is as tax effective as it can be), it’s also a great opportunity to review your business and make required changes.

The Federal Government’s recent Commission of Audit and the resulting May budget is likely to herald an increase to PAYG tax and changes in tax law, which are likely to have flow on effects to your small business. So this year it’s likely to be more important than ever to start the next financial year off with a clean slate, and to get your business planning spot on.

When reviewing your business planning, the first question to ask is how can we increase our profitability more efficiently? It’s important to analyse what worked this financial year, and what didn’t. While doing this, most business owners use this time to reassess their goals, both long term and short, the market and their competition.

An important factor that business owners often forget about is deciding what to do with the extra cash you might have at the end of the financial year. Certainly you can take it as salary, pay tax and have some fun (or pay off some debt), but you might also think about reinvesting it to grow your business.

You might think about capital expenditure – what can you invest in to make your business function more effectively? If this isn’t your strong point, it might be worth seeking professional advice.

Unfortunately, it’s also the time of year where redundancies are most common. Your business’ success will largely rely on its employees and their dedication and performance within the company. It’s a decision most business owners dread, but if your employees aren’t performing efficiently or the business is drowning under the weight of its salaries, now might be the time to make the tough call to let people go. If that’s something you’re considering, yes it’s horrible for you, but it’s usually worse for the employee. Make sure you make their transition out of the workplace as easy and as respectful as it can be.

And last but not least, it goes without saying that this is the time of year to get your financial statements and files together for your accountant. I know it’s one of those tasks most people hate, but the sooner you cross it off your to-do list, the less time you’ll have to waste worrying about it.

If you’re looking for a little extra help this end of financial year with all things accounting, we’d love to hear from you. You can call Kerry on 6023 1700drop us a note or connect with Kerry via LinkedIn.

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