Dan Pollard
The days around the end of financial year can be difficult for trades business owners - keeping track of what you've done, what still needs to be done, and what changes need to be made for the new financial year.
Sure, you know you’ve got the big-ticket items all in order like reconciling your business bank accounts but what about that stocktake you’ve been putting off?
Keep the EOFY panic at bay with our quick checklist for tradies, including some 🔥 hot tips.
1. Write off bad debts
One of the ugly realities of the trades industry is dealing with clients who just don’t pay. If you’re in this boat, and have tried all you can to get them to settle up, it might be time to write it off as a bad debt.
By writing bad debt off by the end of financial year, you could be in for a tax deduction. Keep in mind you might have to provide evidence to prove the client didn’t pay such as email correspondence and any legal action you may have taken.
🔥 Hot tip: If you want to make avoiding late payments and chasing outstanding invoices a priority for the new financial year, check out our hot tips on invoicing.
2. Stocktake
The first step to any successful stocktake, make sure everything is in its place - as much as it can be. The second step - go through all your work vans to see if you can find any materials that may have gone “missing” over the last year. As of 2021 it's no longer a requirement, but we highly recommend you doing so.
Once you’ve got it all in order, figure out what stock is still usable, how much of it you have on hand, and if any stock is damaged or out of date.
For more tips on managing materials, check out our advice on how to organise your storeroom or warehouse.
🔥 Hot tip: Review your pricing strategy at the same time to make sure you're making enough profit on materials.
3. Spend, spend, spend
Have you bought new tools or invested in a new website to help spread the word about your growing business?
Business expenses bought before the end of the financial year can help reduce your taxable income. Just don’t go too crazy. There are conditions involved so double check what you can claim with your accountant.
🔥 Hot tip: The Small Business Technology Investment Boost introduced for the 2022 - 2023 financial allows you to claim 20% on your subscriptions to cloud based services like Xero, MYOB and Fergus.
4. Get up-to-date with changes
The new financial year can bring fresh tax and employment changes that you’ll need to comply with. Do your research or ask your accountant if there are any changes you need to be aware of and what they could mean for your business.
It’s best to be prepared. Changes such as an increase in the minimum wage could have a big impact on your financial forecasting for the new financial year.
5. Back it up
The EOFY is a great time to make sure all your data housekeeping is up-to-date.
If you’re not already, consider using a cloud-based service to back-up your financial data. It’s a cheap way to have a record of your financial data on hand whenever and wherever you might need it.
🔥 Hot tip: Keep up to date with the latest advice on how to keep yourself safe online, like this advice on backups.
6. Take stock of your financial performance
You want to make the coming financial year better than the last right? It’s a no-brainer but making your way through all the accounting numbers to get some useful insight can be a minefield.
One of the most vital numbers to any small business is cash flow.
If you’ve had a year of peaks and troughs when it comes to cash on hand, then perhaps you should make it a goal to concentrate on improving cash flow in the coming financial year.
🔥 Hot tip: Job management software takes the guesswork out of cash flow for business owners. Real-time job costing and automated late payment management helps take the stress out of staying on top of cashflow.
7. Take care of your team
You're not the only one that can get a kick-back from submitting your tax return. Your team are eligible to submit their receipts for things like work travel expenses or work gear.
But first, you need to play your part to provide your team with Income Statements. Double check the salary and wage information you've entered into STP is correct, and review superannuation contributions are up-to-date.
Then you've got until 14 July 2022 to complete finalisation declaration and provide Income Statements.
🔥 Hot tip: Remind your team what they can and can't claim back this year by sharing this handy guide from the ATO for employee tradies.
8. Where do your strengths lie?
If your trade business takes on a variety of different types of jobs, say from residential renovations to commercial fit-outs, then take a moment to go through the numbers on each job. You might find you’re making much more profit on one group of work compared with another.
This insight can give you direction on where to invest your efforts in the new year.
🔥 Hot tip: For tips on finding out where your business is performing at it’s best, check out Malady Electrical’s story.
To find out more about how Fergus smart job management software can get you sorted in the next financial year, sign up for a free trial now.
