With 8 weeks left until the end of the financial year, it is imperative that businesses commence the pre-year end planning process.
We have detailed below some key areas which require the attention of business owners.
Review and reset the strategic plan of the business
Each year the leadership team should take some time to review and reset the business’ strategic plan.
In reviewing the plan, a business should understand their current strategic position, and note any strategies and actions that have yet to be implemented.
The team should then determine where the business needs to be strategically positioned in 1, 2 and 3 years.
The next step is to determine the continued relevance of the strategies and actions yet to be implemented, and prepare new strategies and actions to transition the business to the new strategic position.
An implementation process should then be committed to by the leadership team.
The success of strategic planning can often be dependent on the implementation stage of the process.
Prepare a financial forecast
Once the strategic plan has been reviewed and reset, a financial forecast for the new financial year should be prepared.
It is important the forecast is based on accurate assumptions and can be flexed to allow for a business environment of variable revenue levels, the effect of supply chain challenges, continued salary and wage pressure and increasing borrowing costs.
Current year issues requiring attention
It is common for a business to review the expected tax position for the current financial year.
The complexity of trust and corporate taxation normally requires a business to work closely with their tax advisers before the end of the financial year to ensure all legal opportunities to minimise the business’ income tax liability are taken.
A tax review may include the following items,
- Consideration of any income tax concessions announced in the recent Federal Budget
- Review of any new tax positions adopted by the Australian Taxation Office or legislated by parliament
- Ensure any Division 7A loans are compliant and do not trigger deemed dividends
- Attend to any trustee resolutions distributing trust income for the year ended 30 June 2022
- Declare and document any proposed dividends
- Where the organisation is a small business, consider if there are opportunities to bring forward deductions to the current financial year
- Preparation of income tax estimates for the group (including business owners)
- Discuss with your Financial Adviser any relevant superannuation matters that require attention before the end of the financial year.
Next steps
If you require assistance with any of your financial year end planning please contact us.