Aside from thoughts of taxes, the start of the new financial year doesn’t tend to mean a whole lot for many Aussies, but for Australian businesses it’s an opportunity to reassess goals and plan for the year ahead.
And with a number of new legislative changes coming into effect, now could be a great time for business owners to catch up with the latest reforms before putting their goals into action.
Here are four tips to get your for the 2019/20 financial year rolling:
1. Get acquainted with the latest changes
If you’re not aware of them already, now is the time to catch up on a number of important tax changes that came into effect on July 1, 2019.
“Tax law never stands still, and a number of changes that are in place from 1 July 2019 will likely impact how small businesses operate,” said Chartered Accountants Australia and New Zealand Senior Tax Advocate, Susan Franks.
“Being aware of these regulatory changes and how they can affect you and your business, may assist in the smooth operation of your business and help you maximise your return.”
Among the key changes, the maximum threshold under the instant asset write-off scheme has been increased to $30,000 and it is also now compulsory for all employers to report employee tax and superannuation information using the single touch payroll (STP) system.
It’s also worth noting that the tax rate for active small businesses in Australia will drop from 27.5% to 26% in the 2020/21 financial year and then to 25% in the 2021/22 financial year.
2. Write up a 2019/20 business plan and budget
Now that you’re up to date with the July 1 changes, it’s time to look forward to the year ahead, so what better place to start than with an updated business plan and budget for the 2019/20 financial year?
“We know from experience that creating a business plan often falls into the ‘I’m too busy/it’s too hard basket’ for time-pressed business owners. But putting down a plan on paper is time well spent,” said Scottish Pacific Business Finance Senior Executive, Wayne Smith.
“It keeps you accountable to your goals and shows any potential financier that you have a road map to follow. It doesn’t have to be as long as an epic novel – the plan might only be a few pages that outline your goals and set out how you plan to reach them.”
According to Smith, a simple analysis of your businesses strengths and weaknesses as well as any opportunities or threats you foresee cropping up in the future can be enough to set you on the right path.
In addition, Smith notes that a budget for the year ahead should accompany any business plan, especially if you’re weighing up any potential funding options.
“Budgets are great tools for predicting the financial implications of the business plan, provided your assumptions are realistic,” he said.
“A meaningful budget shows how delivering on your business plan will impact your cash flow. It should contain forward-looking financial forecasts including profit and loss, balance sheet and cash flow statements.”
3. Evaluate your funding needs
If expansion is in your plans for the 2019/20 financial year, chances are you may be weighing up different funding options to make that happen.
Business loans are one way to finance a variety of small business needs - from expansion needs like buying new equipment and hiring new staff, to improving cash flow with invoice financing.
And Australian businesses have access to a number business loan sources including traditional banks and online lenders, although according to online lender OnDeck, some small businesses can have trouble securing funding from traditional sources.
New research from the lender found that nearly 25% of small to medium enterprises (SME’s) that have applied for business finance with a bank have been rejected - a figure that rises to 37% of SMEs which have been operating for less than five years.
“Our research tells us that one in four SMEs plan to seek additional business finance in the future, with significantly higher intention amongst larger SMEs,” said CEO of OnDeck Australia, Cameron Poolman.
“Yet it can be challenging for SMEs to secure bank finance. There is definitely growing interest in alternative lenders amongst SMEs, with one in five likely to consider an online lender.”
4. Reassess your business credit card and bank accounts
Ready to start shopping around for a business loan to help fund those 2019/20 financial year goals? Compare a range of offers from banks and online lenders using the Mozo business loans comparison tables, or check out some of the great deals in the table below.