When it comes to tax time, small business owners (perhaps, yourself included) typically have a lot of questions for us advisors. But sometimes, knowing what to ask – or even how to ask it – can be a challenge. So in the lead up to end of financial year (EOFY), I’ll assess the topics I know are front of mind for clients and predict any other queries that are likely to pop up throughout FY23.
Below is my latest roundup. Take what you need from this list to work together with your advisor in order to nail tax time and the coming months – all so you can set yourself up for a strong year ahead.
1. “What’s different about this EOFY compared to previous years?”
Since the pandemic’s arrival, change has become the new norm for many small businesses. But unlike last EOFY, we’re not all laser-focused on COVID-19. Instead, several global and local crises are also dominating the news. It’s a good idea to chat to your advisor about how these events impact the economy, and in turn, your business. Just remember to take a balanced perspective; your advisor will likely assure you that amidst the turbulence lies opportunities for growth, innovation and connection.
2. “What will you look out for when reviewing my numbers?”
Every EOFY, we’re looking for outliers. In FY22, these could include COVID-19 support grants you’ve received or costs associated with business transformation.
3. “What could I improve on in FY23?”
If you’re anything like my clients, you might’ve become more financially savvy through the turbulence of the past few years. And EOFY is the perfect time to put that newfound confidence into action. Talk to your advisor about how they can help you improve in FY23. Maybe it’s by implementing a digitalisation strategy or a talent attraction program. Whatever it is, don’t underestimate their support.
4. “I’m ready to grow my business – can you help?”
Although the road to recovery remains bumpy, learning to thrive – not just survive – in this new environment is something many small businesses are thinking about. And for some, that means growth. But from an advisor’s perspective, the real question is, can you afford to grow in FY23? Talk to them about what you want to achieve within the next 12 months. They’ll help you assess whether you can fund your growth ambitions on your own, or what external funding options – such as a grant, loan or investment round – might be available.
5. “Should I go bananas investing in tech and training?”
Earlier this year, new tax deductions were proposed for small businesses to invest in tech and digital skills training. Since then, I’ve had clients ask whether this is a green light to spend big on digitalisation. The first thing to note is that these programs haven’t yet passed as legislation. Secondly, if the bills pass, you might have to wait until the end of FY23 to claim your deductions.
With the right guidance from your advisor, tech and digital skills training can be worthwhile investments (regardless of tax deductions). But – like all purchases – you need to be mindful before reaching for your wallet.
6. “How will the new government impact my business?”
The new Labor government has pledged to reduce payment times for small businesses, and work together with business owners to find solutions to things like overly complicated regulation. They’ve also backed some of the former government’s small business digitisation initiatives. However, time will tell whether these ideas will be put into practice.
7. “I’m struggling to find team members – what should I do?”
Finding new team members is ridiculously challenging right now. So my advice is twofold; always be on the lookout, and offer them something unique like training opportunities. If you can build a pipeline of people with potential, and you’re willing to invest into upskilling them, you’ll have a better chance of finding (and keeping) employees than most.
8. “Can I take time away from my business to travel in FY23?”
After recent years, you’re no doubt due for a well-earned holiday. But, if you go to your advisor with this question, you’re really asking if you can afford to travel in FY23. They’ll likely lay out the facts, walking you through your current cash position and what shape your numbers will be in when you return from a holiday. If you have team members, an advisor can also help you implement processes to keep everything humming along smoothly while you’re away.
9. “How do I navigate this new world of remote work?”
Remote work is something we’re all learning to navigate, and your advisor can help guide you by introducing digital tools that’ll enable connectivity and collaboration from anywhere. I’ll often point my clients towards the Xero App Store as a starting point.
10. “I can do my tax return myself, right?”*
Besides the risks involved in tackling a tax return without the guidance of a professional, it’s important to remember that advisors can offer so much value beyond the numbers. If you’re only talking to them once a year, you’re not getting the most out of the relationship. So instead of skimping on your tax return, I encourage you to lean in and learn about their expanded services.
*Disclaimer: The question above isn’t one you should ask your advisor. However, as an accountant, it’s a query I come across all too often. So I’ve gone ahead and answered it to save you the trouble.
When it comes to working with your advisor at EOFY (and all year round, for that matter), every question asked is an opportunity to build trust, and with that, a stronger business. After all, advisors are there to offer advice, so be sure to make the most of it.
Whether you’re a tax time pro or a first-timer, Xero’s EOFY small business resource hub has all the info you need to set yourself up for success.