The Bottom Line: 10 Expert Tips to Blitz Tax Time
We apply the principle of specialisation to so many aspects of life, so why not tax?
Christine Green is the founder of Restaurant Bookkeepers, one of an emerging number of financial services companies specialising in the hospitality industry. After 25 years of operating a design and procurement consultancy building commercial kitchens, Green saw a need for hospitality owners to get on top of their bookkeeping, document flows and business models.
“I love being involved in other people’s businesses,” says Green, who empathises with the pain many hospitality business owners feel at tax time. Here are her top 10 tax-time tips to make things easier.
- Stop doing it yourself. Software providers like to promote their products as easy to do yourself, but this isn’t always the case (and if you put rubbish data in, you’ll get rubbish out). Get help setting things up because cleaning up an accounting file costs a lot more than getting it right in the beginning. That allows you to focus on your main role: strategy and managing people to create revenue.
- Connect to software for document management and electronic filing. If set up correctly, incoming documents will be automatically read, categorised, and placed into appropriate folders without you having to lift a finger. It will clear your desk and inbox, saving you countless hours of admin, and create a secure audit trail. Try Hubdoc, Dext, Autoentry, or LightYear.
- Invest in a high-speed scanner. Many suppliers email bills but delivery dockets and receipts from small suppliers or grocery chains are often still paper-based. Flatbed scanners can be slow and clunky, so opt for something like a front-feeding FUJITSU ScanSnap IX500 and get that desk clear of paper.
- Clean out the cold room and the storeroom and do a stocktake. Most cafes and restaurants don’t track stock until EOFY or forget to do it at all. Even better, do stocktakes quarterly. This helps form a pattern and keeps an eye out for issues such as theft. The stocktake value is required for the end of year, but most businesses forget to do it. Put it in your calendar now.
- Get across payroll. Come to grips with the recent and upcoming changes to payroll and understand how they will impact your business model and cash flow (although your bookkeeper should be keeping you informed). They include increases to restaurant award pay from February 1, 2021 and the superannuation guarantee to 10 per cent from July 1, 2021 (with a further super increase to 10.5 per cent the following year). See Fair Work and the ATO websites for details.
- Connect to STP Single Touch Payroll now. It’s an offence to not have payroll electronically connected to the ATO. Your end-of-year payroll obligations (payment summaries) will need to be reported electronically via STP and your accounting software, but you can ask your BAS Agent bookkeeper to set this up for you now. Popular products include Xero, MYOB and Quickbooks, and payroll-specific products such as Deputy, FoundU and Keypay.
- Make a one-page business plan. List the top five things you need to do over the next 12 months to achieve one key goal. But keep it simple. Figure out what you need to make as the business owner, then work backwards from there. That’s how you want your business to operate for the coming year. Then stick it on your fridge.
- Inspire your team. Use your leadership to generate a positive and proactive culture that inspires your team to ‘buy-in’ so the business can reach those business plan targets. Make the financial year 2022 all about performance, targets and rewards so you can collaborate and build your business.
- Get tax advice on the Instant Asset Write-Off and how it affects your business. The Federal Government has recently increased thresholds and extended eligibility, but a tax benefit may not be a good idea for you if your cash flow is low and you don’t want to increase debt. Don’t get your tax advice from marketers trying to make a sale – see a professional.
- Get your accounting software in order. Engage a skilled BAS Agent bookkeeper to get the “books” and business systems in order and flowing efficiently before you hand them to the accountant. It could save you hours of admin per week and thousands in accounting fees. Remember, accountants charge big fees to make sense of messy Xero files.