As the end of the year approaches, all you want to do is grab your towel and togs and head to the beach, right?
But, before you can clock out completely, there are a few end of year tasks to complete first.
You’ve got public holidays, Christmas parties, financial planning and your ever-present tax obligations to consider.
With a bit of forward planning now, you can overcome all these things, start the new year with a bang and still have plenty of time to relax over the summer!
To ensure you start 2025 in great shape, here are some practical steps you can take to review the year, stay financially compliant and plan for a strong performance in 2025.
Review The Last 12 Months
Before 2024 becomes a road sign in the rearview mirror, it is important to take the time to reflect on the year that was. Doing it before you close off for the year will mean the information is fresh in your mind and you don’t forget anything that took place.
Reflection is an important tool in any business. It allows you to gain valuable insight into what’s working well and where you could make improvements. It also provides an opportunity to celebrate your team’s achievements, address challenges, and refine your future growth strategies.
When you can reflect and identify patterns, evaluate performance, and learn from both your successes and setbacks, you can make more informed decisions to drive your business forward in 2025. Consider:
- What worked well? Did certain revenue streams or strategies work better than expected?
- What didn’t go to plan? Did you have areas where your expenses blew out or your revenue fell short?
You’ll find all the answers you need in your profit and loss statements, cash flow reports and balance sheets. Examine them to identify any trends or discrepancies. Then, consider your tax obligations and progress made against any business goals – do you need to modify your approach for the year ahead?
Practical Steps To Take Now:
- Book a strategy session with your accountant to set some clear business goals for 2025
- Review your budget to see if it still fits and adjust it accordingly to reflect any fluctuations in income and expenses
- Identify if there are any opportunities to improve your cashflow – it could be things like adjusting your payment terms or reducing overheads
If you take the time to reflect on 2024 and put a clear plan in place now, you can hit the ground running when the working year begins again in January.
Consider How Your Christmas Party Might Impact Your FBT
An end of year celebration is a great way to thank your team for their hard work and to celebrate the milestones you have all achieved throughout the year. But, it’s important to remember that celebrations can come with tax implications. It pays to educate yourself so you don’t get caught off guard.
Fringe Benefits Tax (FBT) is a tax that applies to perks like entertainment, meals and gifts that you provide to your employees. If you understand the rules, you can save any unnecessary tax headaches.
Here are the main points to understand:
- The Purpose: If your end of year celebration is solely for entertainment purposes then it could attract FBT. Light refreshments served during the day to make your team more comfortable are less likely to attract FBT.
- The Attendees: If you have clients or contractors that attend your function, their portion may be treated differently from your staff from a tax perspective.
- The $300 threshold: If the cost of your function is under $300 per employee then a minor benefit exemption may apply, meaning FBT may not be applicable.
If you are unsure whether FBT will be a concern for your Christmas party plans, then you can find out more about the regulations in our recent blog.
Practical Steps To Take Now:
- Keep detailed records of your end of year celebration including who attended, what was purchased and when.
- Talk with your advisor to ensure you are compliant with the necessary regulations surrounding staff entertainment and that you won’t be liable for unnecessary tax.
A little planning now can make sure your Christmas celebrations don’t result in a bigger-than-expected bill later!
Keep Your Finances Looking Good For 2025
Summer can often be a season of feast or famine for businesses. It is common to experience a seasonal lull or a big boom of activity depending on your industry. Either way, staying on top of your finances is essential for avoiding stress when tax time rolls around.
Top Tips For Staying Financially Healthy:
- Get Organised: If the summer months are a quieter time for your business then it is the perfect excuse to organise your receipts, invoices and expense records. This task becomes that much easier if you are using a cloud-based accounting software.
- Monitor Cash Flow: Consistent cash flow is a key component of business, but it can be impacted by the holiday period. Keep a close eye on your incoming and outgoing payments and if you expect potential delays, consider invoicing earlier or negotiating terms with your clients and suppliers.
- Prepare a Budget: Review last year’s budget or income and expenses, review any fluctuations, set your goals and prepare for the year ahead.
- Review Your Expenses: Check your expenditure and trim out any unnecessary expenses – think unused subscriptions or expired supplier contracts.
- Prepare For Tax Time: It won’t be long until tax payments are due, so make sure you continue to put money aside for upcoming GST and income tax liabilities so you aren’t caught short.
Practical Steps To Take Now:
- Organise a time to catch up with your Cadenze team member for a mid-financial-year review to ensure your finances are looking good and you are set for the year ahead
- Assess your actual performance against your budgets and forecasts to see if you need to modify your projections to remain on target.
By staying proactive with your finances now, you can make sure your business remains financially stable heading into the new year.
Expert Summer Support
In terms of summer support, Santa has his elves and the beach has its lifeguards, but what does your business have? The team at Cadenze of course!
Running a business comes with enough challenges at the best of times, you don’t want to create any stress over your summer chill-out period! The solution is to let your accountant keep your finances on track. From tax planning and FBT advice to business strategy for 2025, our expert guidance can ensure you’re positioned for success.
Need help getting ready for 2025? Book a consultation with us today to ensure your business is positioned to hit its financial goals next year.