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Year-End Planning Tips For Your Business

Building a relationship with your accountant is something that you should be putting into practice throughout the year, as they are in a position to help guide you through challenging times. From a business perspective, now is a great time to sit down with your accountant and discuss your year-end business planning. 

One of the biggest mistakes that a business owner might make is waiting to speak with their accountant about critical business issues until tax time. However, there are many critical tax and accounting decisions that have imminent deadlines.

Arranging a year-end business meeting with an accountant is one way to ensure that you are engaging with your accountant pre-emptively( and outside of the usual frenzy of tax time).

After a year of challenges (be they social, economic or environmental), businesses may be looking towards planning for their next year ahead. With some smart financial planning, you can minimize uncertainty and maximize opportunities to grow your organization.

During a year-end business planning meeting, here are some questions that you can ask your accountant to prepare for 2022. 

 

What Does The Tax Situation Look Like? 

Tax is never simple, and you may usually leave it to your accountant to ensure that things are being completed properly. However, 2021 has had a few financial, legislative and practical uncertainties that may have occurred for your business that could make filing taxes a headache for everyone involved. 

In this case, ensure that you are aware of: 

  • What your estimated tax payments may be so that you can avoid unexpected penalties.
  • How you can minimise your taxable business income for next year.
  • Finalising business closure procedures, and what may be expected of you
Budget & Cash Flow Situations For 2022

It’s more important than ever to ensure that you have a good budget and cash flow plan in place. The following are ways that you and your accountant can discuss optimal strategies for your business in a year-end planning meeting.

  • Set a budget for 2022 – This will show how you intend to operate and provide a framework for your business’s future. A budget is a tool for planning and controlling your finances, as well as an early indicator of any problems or setbacks down the road. Your budget allows you to make decisions informed by the financial realities of the previous year, and map out better ways of traversing them in 2022.
  • Create a safety net for 2022’s potential challenges with improved cash flow that can weather the direst of situations, and plan for when that may not be enough.

As accountants, we are the experts you may seek for assistance with business planning and tax questions. When it comes to your end of year planning, you may want to consider beginning a conversation with us so that we can help you look towards 2022.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

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Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier