EOFY is over. Now is the time for the financial conversations that actually shape your small business.
For many small business owners, the end of financial year tends to follow a familiar pattern.
June arrives. There’s a rush of tax planning, last-minute questions and conversations about deductions, super payments or whether now is the right time to make that purchase.
Then 30 June passes, everyone exhales and attention goes straight back to running the business. But this period after EOFY can actually be one of the most useful times to sit down with your accountant.
Why?
Because there’s a whole financial year ahead of you. There’s time for discussions around what’s working and what isn’t, time to strategise, time to change things up and, time for the implemented changes to make a genuine impact before next June arrives.
Tax compliance isn't the same as business advice
Having your tax returns lodged correctly and your BAS submitted on time matters, but compliance and strategy are two different things.
Your accounts tell you what has already happened. Good advisory conversations use that information to help shape what happens next.
Now that another financial year has closed, there are some big-picture questions worth asking:
What did last year's numbers tell us?
What should we do differently this year?
Is our business structured appropriately?
Is cash flow as steady as it should be?
Are our margins strong enough?
What tax obligations should we be planning for next?
Is the business bringing us closer to our desired lifestyle?
Those conversations are much more useful in September or October than they are when everyone is scrambling again next June.
Use last year's numbers to make this year better
One of the advantages of looking at your finances now is that you're not just looking in the rear-view mirror - you're creating a vision for the year ahead.
Perhaps revenue grew last year, but profit didn't grow with it.
Maybe costs increased significantly.
Perhaps there's more money moving through the business, but cash still feels tight.
Or maybe the business has changed enough that the structure, systems and financial strategy that worked a few years ago deserve a review and refresh.
These aren't necessarily signs that something is wrong, they're sources of information – and the sooner you understand what that information is telling you, the greater your ability to make sound strategic decisions with it.
A few questions worth asking your accountant now
If most of your conversations with your accountant happen around tax deadlines, try starting a different conversation.
“What did you notice in last year's numbers?”
Don't just ask whether you made a profit. Ask what changed and what should change.
Where did margins improve or decline?
Which costs moved significantly?
How did cash flow perform?
“What should I be preparing for over the next 12 months?”
You shouldn't have to wait for an obligation to arrive before finding out about it.
Talk about upcoming tax obligations, cash requirements, investment, staffing, finance and anything else likely to affect the business this year.
“Is my business structure still the right fit?”
The structure that suited the business when you started may not necessarily be the best fit today.
Revenue and expense patterns change, teams grow, asset mixes vary, legislation changes, and your personal circumstances and long-term goals can change too. It's all worth reviewing on a regular basis.
“Where could we improve profitability or cash flow?”
More revenue doesn't automatically create a stronger business.
Understanding margins, costs, pricing and the way cash moves through the business can reveal opportunities that simply chasing more sales won't.
“If you were in my position, what would you focus on this year?”
This is one of our favourite questions because it shifts the conversation from deadlines and tax towards business performance.
Don't wait until next June to start planning for next June
Tax planning is far more useful when it forms part of a holistic financial plan.
If you know what profit is likely to look like, understand your upcoming obligations and have visibility over cash flow throughout the year, the next EOFY becomes much easier to manage.
You also have far more opportunity to make educated decisions instead of rushing them as a deadline fast approaches.
And that's really the point - your accountant should help you look forward too.
We work with business owners who are incredibly good at what they do, but when you're immersed in customers, staff, suppliers, jobs and the hundred other things involved in running a business, it can be difficult to step back and properly interpret what the numbers are telling you.
That's where a good advisory relationship becomes valuable. Not just at tax time – but right throughout the year.
Your accountant should be able to help you understand what's happening, identify what deserves your attention and have the important conversations early enough for you to take meaningful actions.
So while 30 June might be behind us, don't brush the big-picture financial conversations under the carpet until next year. In many ways, now is the best time to have them.
If you'd like to understand what last year's numbers mean for the year ahead, we’d love to help you. Simply call us to book in a free, no-obligation initial consultation.
If you’re reading this and we’re already working together, please pass it on to someone you know who is frustrated that their relationship with their accountant begins and ends with compliance. We'd be very happy to have a conversation with them too.
Angus Emery is a Senior Accountant at blueprint4, a small to medium business accounting and advisory firm based in Warragul. blueprint4 works with business owners across Gippsland and Melbourne's South East.
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