Now we’re rapidly approaching the end of the financial year, many SMEs are in a rush to optimise their tax and financial affairs before June 30.
However, it’s important to note that the beginning of FY25 represents an opportunity to hit the ‘refresh’ button on your business strategy for the coming year, and together with your accountant, broker and lender, find ways to chart a better future.
There are a host of challenges facing small business from elevated inflation through to household cost of living pressures, rising insolvencies, an ATO tax crackdown and an increasingly complex regulatory environment.
Banjo Loans Chief Risk Officer Andrew Ward has below provided his top tips for BOFY (Beginning of Financial Year) so SMEs can get into financial ship shape for FY25.
- Financial health: Use the start of the financial year as an opportunity to review your financial statements with your lender, broker and accountant. There may be valuable insights which can be extracted from your data in respect to your business’ financial health and accordingly opportunities for improvement. This is important because, by being proactive, you can ensure there is time to plan appropriate taxation strategies, rather than leaving it to the end of FY25. In addition, if you have any growth plans for the year, it’s a smart idea to think through your business strategy and document the details so it can be submitted for consideration by brokers and lenders.
- Government grants and incentives: It's worth considering what Federal and/or State Government grants or incentives are available that could provide a boost to your business. These opportunities can provide much-needed support to enable business growth and innovation. For example, new funding has been announced to provide SMEs with mental health support under the New Access for Small Business Owners Program while the National Tax Clinic Program provides tax advice and assistance to eligible SMEs.
- New policies, rules and regulations: Ensure that you are across any new government or regulatory obligations for FY25 in respect to your business. There are a number of tax-related changes, import tariff amendments, energy bill refunds and numerous initiatives related to ‘green energy’ which you may need to consider as part of your operational planning for FY25, depending on the nature of your business.
- Workforce development: It is commonly accepted that the success of many businesses lies with its people. That’s why it is so important to plan to invest in employee training and development to not just boost productivity but aid in employee retention. Moreover, fostering a diverse and inclusive work environment can drive innovation.
- Digital investments and leveraging Artificial Intelligence (AI): The ‘digital revolution’ has well and truly arrived, which is affecting the business landscape. It is crucial you question how your business can leverage e-commerce and digital marketing, as well as ensuring that your business has taken the appropriate cybersecurity risk management steps. Public access AI, which is rapidly developing, may also provide opportunities to increase efficiencies in your business
Assessing and analysing the above subjects in detail may give your business a greater chance of success in FY25 with the right tools and initiatives.
