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EOFY Checklist for Small Businesses

 

With the end of the financial year (EOFY) rapidly approaching, it is critical that small businesses have their financial and business affairs in order.

The end of the financial year refers to the completion of the 12-month accounting period (30 June).

We’ve put together a quick checklist addressing several aspects small businesses should consider before 30 June 2022, to help them work smarter and have their business organised for the upcoming financial year.

 

1. Superannuation

 

From 1 July 2022, the superannuation guarantee (SG) percentage increases from 10% to 10.5%.

The SG is the minimum percentage an employer must pay their employees as superannuation.

 

What does this mean for small businesses?

 

For employees that are paid a salary inclusive of superannuation, employers will need to re-calculate their employee’s superannuation entitlements paid into their super account (rather than into their payroll account).

For those paid exclusive of superannuation, employers must ensure they pay an additional amount of superannuation into their employee’s superannuation account.

From 1 July 2022, businesses will also need to pay super contributions for all employees regardless of how much they earn (the $450 per month minimum will still apply for staff under 18 who work less than 30 hours per week).

Removing the income minimum should be extremely beneficial to women, who tend to have significantly less superannuation than men when they retire.

 

2. Minimum Wage

 

On 15 June 2022, the annual minimum wage increase was announced at 5.2%, eclipsing the current 5.1% inflation rate.

 

What does this mean for small businesses?

 

Employers may be required to update their employee’s salaries in line with the new minimum wage.

Employers should also review existing contracts, awards, and agreements to ensure rates of pay satisfy all requirements.

 

3. Record Keeping

 

Record keeping refers to the organisation of all files, invoices, and employment information relating to a business’s activities.

A common small business characteristic is that they typically do their own accounting and reporting.

Proper books and records, particularly those that relate to employment and tax affairs, must be kept to mitigate future tax issues and, in some circumstances, must be kept as a matter of law.

 

What does this mean for small businesses?

 

There are many practices small businesses can take advantage of to avoid record keeping related issues, such as:

  • Review all policies and procedures;
  • Ensure all employees have updated employment contracts;
  • Ensure a summary of business income and expenses are available (e.g., profit and loss statement); and
  • Ensure payroll records are up to date.

 

4. Work Health & Safety (WHS)

 

The end of the financial year is a great time for small businesses to review their WHS obligations.

WHS involves managing risks to the health and safety of all in the workplace, and may include workplace fire procedures and ‘tag and testing’.

 

What does this mean for small businesses?

 

It is in the employer’s best interest to reassess their employment policies and guidelines regarding WHS and new working arrangements.

For example, WHS responsibilities do not change for an employee working remotely (e.g. from home) and employers must ensure their employee is working in a safe workspace.

In Hargreaves v Telstra Corporation Limited [2011] AATA 417 (“Hargreaves”), an employee fell down her stairs during her hours of employment whilst working from home.

The tribunal found both injuries to be work-related, even though she was not necessarily required to move around to perform her duties of work.

It is strongly recommended that employers have a Working from Home WHS Checklist and Policy in place.

Read more about this case here.

 

5. Stocktake

 

Stocktake refers to the recording of total stock held by a business at a particular point in time, typically at the end of the financial year.

Small businesses ought to perform a stocktake at least annually.

 

What does this mean for small businesses?

 

Stocktake should include detailed information about the stock-on-hand as of 30 June.

For example, the total units of stock and its monetary value (this is usually a physical count).

This is then reconciled against a summary of purchases and sales of inventory records, and adjustments may be required to have an accurate understanding of the true stock on hand value.

 

6. Insurance

 

It is important for small businesses to review their insurance annually, and the end of the financial year is a great time to do so.

Business insurance may include Business Interruption Insurance, Public Liability Insurance, Tax Audit Insurance, and Cyber Liability Insurance.

One key element to reviewing your insurance is making sure the business’s assets are insured for the cost of today’s prices and not what was once paid for them, for example.

 

What does this mean for small businesses?

 

All businesses are presented with risk regularly, regardless of size, industry or location.

Reviewing insurance helps small businesses make informed coverage and cost-minimising decisions.

Prepaying insurance may be an allowable tax deduction for the business too.

 

Contact Us

 

For more information, contact us at Bambrick Legal today. We provide a free 15-minute consultation for all new enquiries.

You can also read more about our business and employment law services here

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