End of Financial Year Compliance Goes Beyond Taxes
While accountants play a crucial role in ensuring tax compliance, legal compliance is equally important. This includes compliance with business structures, contracts, employment agreements, and regulatory requirements.
Neglecting these areas can result in severe consequences such as financial penalties, legal disputes, and damage to reputation.
1. Verify and update your business details
- Check your ACN, address, business name, and TFN to make sure they are up-to-date.
- Update it online through the Australian Business Register (ABR) online, by phone or by lodging a form.
2. Review your business structure
- Your business is not the same as it was when you first started. You may have more customers, more staff, more revenue, or even different products or services. It’s important to review your business structure every few years or when there is a business change.
- There are different types of business structures including sole trader, partnership, trust, company, and joint venture.
- Your business structure can affect the amount of personal liability you have for the debts and obligations of your business; the way your business is taxed, the ease with which you can obtain finance for your business; the level of control you have over your business and the ability to change your business in the future.
3. Review your contracts with your landlord, vendors, distributors, and customers
- Review your contracts to ensure they protect your interest and are still in line with your needs.
- Review the following aspects: the scope of work or services provided, the pricing and payment term, the delivery and performance schedule, the warranty and indemnification provisions, the dispute resolution process, and any other relevant conditions.
4. Review your employment obligations and workplace policies
- Have clear and concise workplace policies and employment entitlements in place that comply with all applicable laws and regulations.
- Find out which award your business belongs to and hence what entitlements you should provide for your employees, including salary, superannuation, leave entitlements and working hours.
5. Check for any upcoming licenses and fees and their renewal dates
- Make sure you know of any upcoming licenses and fees you need to renew.
- Apply for any missing licenses and renew your licenses on time.
6. Follow up on any debts owed to your business
- Keep track of all debts owed to your business. This includes invoices, outstanding payments, and late payments.
- Send out reminders to customers who are late on their payments. Be sure to include the due date, the amount owed, and any late fees that may apply.
- If a customer continues to be late on their payments, you may need to take further legal action.
7. Review your insurance coverage and make necessary changes
- Make sure you have the right type and amount of the insurance coverage for your business.
- Review your insurance policies on a regular basis to make sure they are still up-to-date.
- Make changes to your insurance policies as needed.
- Consider working with an insurance broker to help you review your insurance coverage, increase your coverage limits, or change your providers.
8. Plan for the new financial year and develop a budget and cash flow forecast:
- Set goals for the new financial year.
- Create a budget that will help you achieve your goals.
- Develop a cash flow forecast.
- Review your budget and cash flow forecast on a regular basis.