5 Considerations for the New Financial Year
By Frida Andersson & Ben Cobussen
As accountants we’re getting our fireworks ready to celebrate the end of another (financial) year. 30 June is our New Year’s Eve, and when we prepare to reset our calendars to say ‘2024 Financial Year’. But before we take the leap, here are 5 things that can help you start the new year right.
1. Finish your projects
Often the day to day running of a business can be so consuming that those big picture projects you wanted to work on get left behind. The start of a new financial year is a natural launching pad to implement a program or system that you have wanted to put in place. Want to digitize your inventory system? Want to try that new payment system you’ve been looking at? Set yourself the new financial year’s resolution of getting one project done by 1 July to kickstart your business in the new year!
2. Conduct an HR annual review
Check pay rates for your employees
Increases to minimum pay rate increases are usually effective from 1 July every year in both the state and federal industrial relations systems. The Fair Work Commission has already announced a 5.75% increase to minimum rates in the national system. At the time of publishing this newsletter, we are still waiting for the WA government to announce increases to minimum rates in the state system. To ensure you are not under paying your employees after 30 June ticks over, check the relevant Award for your employees to confirm increases to the minimum rates.
Increase to the super guarantee
From 1 July 2023, the next stepped increase to the superannuation guarantee will be effective. It is rising by half a percent from 10.5% to 11%. Now is a good time to start planning how this change will be implemented.
3. Are you using the right software
Is your accounting software doing what you want it to? There is a huge variety of programs out there, so if you aren’t happy with what yours offers, look around at the other options - you may be surprised at what is on offer.
Over the last few years there has been a large move to cloud based software, which has the huge advantage of keeping your financial information accessible wherever you can get internet access. Most of the larger programs now have apps that you can download to help make the process even quicker. With these new cloud based programs, there is no need to install a program on each device. Setting up a new program also isn’t as complicated as you might think, and making sure you are ready to go for the new financial year makes the transition even smoother. Give us a call if you want some help changing over.
4. Set aside money for tax
If you earn business or investment income you may have up to 5 income tax payments to make in the 2024 Financial Year; 4 x PAYG Instalments (due end of July, October, February and April) plus a possible income tax payment when your 2023 Tax Return gets lodged. Review what your income tax payment amounts are likely to be for the next 12 months and make a plan on how you will have the money available when the tax is due. Reach out to your accountant if you need assistance with this. You will likely be hit with some expenses in the 2024 Financial Year that you haven’t planned for but taxes shouldn’t be one of them.
5. Reflect & Reset
A new year provides a great opportunity to not only look ahead but more importantly look back and reflect on the year that’s been. What went well, what went not so well, what can we improve? Did I spend my time on the things that I like doing, did I get reward for my efforts?
To look back will help you identify areas of your business (and life) to work on and give you a clearer direction for the 2024 Financial Year. But thinking takes time, if you have the opportunity now is also a good time to stop and reset. For some, this time of year is not the ideal time to take a break. If this is you, consider booking something in now for your quietest time of year. Having something to look forward to can be a great motivator.
You might not get as excited as us accountants for the beginning of a new financial year, however we do hope our tips help you get the year off to a cracking start. If we can help you with any of your new year’s resolutions, please give us a call.
