Let’s get this straight; EOFY is a pain for almost everyone (perhaps with tax accountants as the obvious exception). However, it is also full of opportunities, and for those working in the trades EOFY can be a game changer. On top of your non-negotiable EOFY ‘To Do’s’ (like seeing your tax accountant and getting your paperwork in order), there are some smart moves you can make to cut your tax bill and save on investments. To set yourself up and spend where it counts, we’ve put together some top ways to save money and equip yourself for success in 2019/20.
1. Invest in tools and equipment with the instant tax write off
This year the instant tax asset write off threshold has been increased to $30,000. That means you can instantly write off the business portion of each individual asset up to $30,000 purchased between 2 April 2019 and 30 June 2020. The assets can be new or second hand and must be first used or installed ready for use from 2 April 2019 to 30 June 2020*.
So if you’re looking to expand your services, upgrade your tools or need to equip a new apprentice or staff member, now is the perfect time to take on some of those bigger expenses and cut your tax bill instantly. If you don’t have the cash flow on hand immediately, consider a small loan to make sure you don’t miss out on what could be thousands of dollars in savings.
2. Take advantage of EOFY Sales from your suppliers
The EOFY period creates a sales and purchase cycle like no other, a beautiful phenomenon tradies can take full advantage of! Most of your suppliers will be required to do a stocktake and will end up having a last minute EOFY sale to try get rid of slow moving stock and generate more cash. This means you’ve got the perfect opportunity to stock up on discounted product now and save into the new year. To truly make use of this have a good look at your past purchases and identify what you purchase the most of and buy in bulk.
3. Be ready for last minute labor demand
Part and parcel to the EOFY cycle is business owners and property managers scrambling to cut their own tax bills by crossing off property expenses. This means the odds are pretty good that you’ll also experience a spike in demand as other businesses move to squeeze in last minute property repairs or renovations to deduct from their tax bills.
Ensuring you have extra funds in the bank to put on extra staff, buy extra stock, and be financially agile enough to respond to market changes will all count toward maximise your profits over the EOFY period.
4. Upgrade your business vehicle or fleet
At the end of the financial year, the best case scenario for a car importer or distributor is minimal stock, and maximum cash. This means they often offer wholesale incentives to car dealers in order to try and move old stock. Whether you’re a sole trader or running a larger operation, the EOFY sales are the perfect time to save thousands upgrading your vehicles.
5. Get all of your invoices settled
The benefit of getting your invoices organised for EOFY goes beyond just balancing your books. Just as you’re trying to tie up loose financial ends, so too are your suppliers. This means many suppliers will be offering significant discounts for early payment. So even if you have plenty of time up your sleeve before the due date, paying early can save you big dollars. Plus you can then claim the expenses in this years EOFY and cut your tax bill even further.
To take advantage this EOFY and supercharge your trade for success in 2019/20 talk to us today on 1800 676 652 about getting a short term business loan, or apply now with our hassle free, 10 minute online application.
*Please seek advice from your tax advisor regarding your eligibility for the Australian Government’s simplified depreciation of assets for small businesses, and how this will impact your business. Assets must be bought and used or installed ready for use to be eligible. For further information on the Australian Government’s Instant Asset Write-off Scheme, including up to date information on eligibility and the write-off threshold, see the ATO website at: https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/