EOFY Mastery: The Complete Guide for Australian Small Businesses

The end of the financial year (EOFY) is a pivotal time for small businesses across Australia. More than a compliance deadline, it’s a unique opportunity to review your business’s financial health, maximise tax benefits, and set the stage for future growth. This guide brings together the latest advice from the Australian Taxation Office (ATO), business.gov.au, state and territory business departments, and industry experts to ensure your business is ready for EOFY and beyond.

Understanding EOFY in Australia

EOFY in Australia ends on 30 June. For small businesses, this period involves finalising accounts, lodging tax returns, and ensuring compliance with both federal and state requirements. Each state and territory offer unique resources and checklists to help businesses meet obligations and capitalise on available support.

Reviewing Financial Health and Key Documents

ATO and State Record-Keeping Requirements

Maintaining accurate and up-to-date records is a legal requirement. The ATO mandates that businesses keep records for at least five years, including invoices, receipts, payroll, and bank statements. State business departments often provide free EOFY checklists and digital tools to help you organise paperwork and ensure nothing is missed.

Best Practices:

• Store records securely and label for easy access.
• Ensure all documents are in English or easily convertible.
• Use encryption and password protection for digital files.

Reconciling Accounts and Stocktakes

Reconcile all business accounts, including credit cards and loans. If you hold inventory, conduct a thorough stocktake—this is not only a compliance requirement but can also reduce your taxable income by writing off obsolete or damaged stock.

Using ATO Tools to Assess Financial Health

The ATO offers several free tools to help you evaluate your business’s financial position before EOFY:

• Gather your profit and loss statements, balance sheet, aged creditor and debtor listings, and debt repayment details for the current and previous two years.
• Enter these figures into the tool to receive a detailed report highlighting your business’s financial strengths and weaknesses, including key ratios and potential issues.

• Use the business performance check to compare your financial ratios (e.g., cost of sales to turnover) with ATO industry benchmarks.
• The myDeductions tool helps you record income, expenses, and deductions on the go.
• The app also features ABN lookup and tax calculators for payroll and supplier management.

• Access benchmarks for over 100 industries via the ATO website or app.
• Compare your cost of sales, labour, and rent ratios to industry averages.
• Staying within these benchmarks reduces the risk of ATO scrutiny.

• Review your balance sheet, profit and loss statement, cash flow statement, and budget.
• Look for trends such as declining sales, low profit margins, or periods of low cash flow.

• Use these tools throughout the year to spot issues early and make proactive adjustments.

Maximising Deductions and Smart Tax Planning

Instant Asset Write-Off and Prepaid Expenses

• Eligible small businesses can instantly write off up to $20,000 per business asset purchased and installed between 1 July 2024 and 30 June 2025. Prepaying up to 12 months of expenses—such as rent, insurance, or subscriptions—before EOFY can also bring forward deductions, reducing your assessable income for the year.

Superannuation and Payroll Compliance

• Superannuation is only deductible when received by the employee’s fund by 30 June. The Super Guarantee rate is now 11.5%. Missing the deadline means losing the deduction and risking penalties. Ensure all payroll and superannuation records are reconciled and compliant with Single Touch Payroll (STP) requirements.

Reporting Government Grants and Payments

• If you received any government grants or support payments, check whether they are taxable and report them correctly in your tax return. The ATO and state business departments provide guidance on which payments are taxable and how to report them.

Cash Flow Management and Business Health

Reviewing Receivables and Payables

Assess outstanding invoices and follow up on overdue payments. Consider incentives for early payment to improve cash flow. Review your payables and schedule payments to optimise your cash position while avoiding late fees.

Cash Flow Forecasting and Planning

Use EOFY as a time to forecast cash flow for the coming year. Identify seasonal trends, major upcoming expenses, and set aside reserves for unexpected costs.

Many state and territory business departments offer free forecasting templates and workshops.

Employee and Payroll Considerations

Payroll Reconciliation and Single Touch Payroll

• Ensure all payroll records are accurate and up to date, including wages, superannuation, and PAYG withholding. Lodge PAYG statements and comply with STP obligations to meet ATO and Fair Work requirements.

Superannuation Deadlines and Staff Bonuses

• Process staff bonuses and ensure all superannuation contributions are paid before EOFY. This supports your team’s financial wellbeing and keeps your business compliant.

Compliance: Key Financial Dates and Obligations

Lodgement Calendars and Important Dates

• Staying on top of key dates is crucial for compliance. Here are some of the most important financial deadlines for small businesses in Australia (see business.gov.au for a full list): If a due date falls on a weekend or public holiday, you can lodge on the next business day. Use reminders or digital calendars to track these dates.

Reviewing Business Structures and Licences

• EOFY is an ideal time to review your business structure—sole trader, partnership, company, or trust—to ensure it still meets your needs. Check if any state or territory business licences or registrations need updating.

Leveraging Professional and Government Support

Engaging Registered Tax Agents

• A registered tax agent ensures your tax returns are accurate and compliant, helps you uncover tax-saving opportunities, and can represent you in dealings with the ATO. Over 90% of small businesses use a tax agent for EOFY.

State and Territory Business Department Resources

Each state and territory has a dedicated business department offering:

• Free EOFY checklists and guides
• Workshops and webinars on compliance and tax planning
• Support for accessing grants, funding, and digital tools

Embracing Digital Tools and Cyber Security

Upgrading Accounting Software

• Modern accounting software automates BAS, payroll, and expense tracking, making EOFY less stressful and more accurate. Ensure your software is up to date and staff are trained to use it effectively.

Data Security and Regular Backups

• Protect your business data with robust cybersecurity measures and regular backups. This is critical for compliance and business continuity, especially during EOFY when accurate records are essential.

Planning for Growth Beyond EOFY

Setting Goals and KPIs

• Use EOFY insights to set clear goals and key performance indicators (KPIs) for the new financial year. Review what worked, what didn’t, and adjust your strategy accordingly.

Accessing Grants and Support

• Many state and territory governments offer grants and business support programs. Explore these opportunities to fund growth, innovation, or digital transformation in the year ahead.

Conclusion

EOFY is more than a compliance deadline—it’s a chance to reflect, reset, and plan for a stronger future. By following ATO guidelines, leveraging state and territory resources, and engaging professional support, your small business can thrive in the new financial year.

Primary sources utilised for this blog post include:

• Australian Taxation Office calculators and tools
• ATO app for business
• gov.au yearly financial tasks
• ATO small business benchmarks
• ATO digital record-keeping guidance
• Small business viability tools
• State government business health resources
• Industry EOFY checklists and guides