It’s the end of the financial year, so July is a great month to make sure your business is ready for the year ahead.
End of year finalization via STP
Unless your business is exempt from Single Touch Payroll (STP) reporting, you must complete your year-end finalization by July 14th every year.
You can finalize your STP data earlier if it is ready. The sooner you finalize your employees’ information, the sooner they can file their tax return.
Pay As You Go (PAYG)
Paying your income tax in installments throughout the year helps you manage your cash flow and avoid a big tax bill when you file your tax return.
If you are already making payments through the Installment System (PAYG), make sure your activity returns have been filed and all your PAYG installments have been paid before you or your agent files your tax return . In this way, your tax notice will take into account the installments you have paid throughout the year.
Review your business plan and prepare a budget
Setting financial goals allows everyone in your business to focus on the areas that are important for success.
How to prepare a budget plan
- Review last year’s operations and financial results and prepare an analysis of strengths, weaknesses, opportunities and threats (a SWOT analysis).
- Make a list of where you would like to see your business in a year.
- Prepare action plans for each item on your list and assign responsibility and timeline for each action – use our one-page action plan template to guide you.
- Create your business budget.
When developing your business plan and budget:
- research your industry, looking for trends and opportunities to grow your business
- involve your staff as they may have suggestions for improvements – if they are involved in development they are more likely to support new plans
- critically examine your financial results and identify areas where revenue and expense improvements can be made – use financial ratios to measure your financial performance
Revise your business structure
It might be a good idea to review your current business structure to see if it’s still right for you. You can change your business structure as your business grows or changes.
Prepare a profit and loss budget
A profit and loss budget is the future financial plan of the company. By making a budget, you can see if your plans for your business operations will be financially viable.
How to prepare a profit and loss budget
To prepare the profit and loss budget for the selected period:
- Download our Financial statement template (XLSX 296.44 KB) or use your own.
- Review the approved operational plan and note all required activities for the budget period.
- Review your previous year’s profit and loss statements in regular periods – monthly, quarterly, etc.
When preparing your budget:
- identify and document any assumptions you made for the budget period – when you compare actual expectations to budget forecasts, you will know what assumptions you made to support the financial budget figures you used
- set your budget results to match your financial reports – it is recommended that you prepare financial statements monthly so that your budget details monthly financial expectations
- regularly monitor your budget against actual results – you will be able to see if there are any problems and take quick action to ensure that your annual business plans are met
Prepare a cash flow forecast
A business can be profitable while having cash flow problems.
It is important to focus on cash flow management at all times. Preparing a cash flow forecast when preparing new business plans will ensure you have enough cash to support the new plans.
How to prepare a cash flow forecast
- Prepare a sales forecast using your business plan and profit and loss plan – include information on when customer receipts will be received.
- Prepare details of all other estimated cash inflows, such as asset sales, GST refunds, loan funds.
- Estimate cash outflows, including when you will pay them.
- Compile this into a cash flow forecast.
When preparing and monitoring your cash flow forecast:
- be as specific as possible on the timing of cash flows
- regularly compare your cash forecasts to actual results, including bank balances – you’ll be able to spot problems and act quickly to ensure your annual business plans are met
- once forecasting is complete, run “what if” scenarios to measure your company’s cash flow responsiveness to certain changing events, such as declining sales, rising fuel costs
Full staff reviews
Performance reviews and appraisals help employees know how they’ve done against the goals and demands of their job.
The reviews also provide insight into what staff might need in terms of development or training.
How to Complete Staff Assessments
- Set dates and times with each staff member to discuss the exam.
- Use a standard Performance and Development Agreement Plan Template (DOCX 32.22 KB) take notes and discuss with each staff member.
- Make sure that each staff member agrees to the objectives set and provide them with a copy of the discussions.
When preparing staff appraisals:
- define key performance indicators (KPIs) for each staff member that align with overall business objectives
- remove the prospect of a salary discussion – the employee should think about the job itself
- recognize the good work of staff, discuss weaknesses or problems and identify solutions together
Back up your data
A technology failure or cyberattack that compromises your data could disrupt your business. Make sure you have a good system that backs up your data and protects it from cyber threats.