Preparing for End-Of-Year Accounting: A Checklist

As the end of the financial year (EOFY) rolls around, every business owner in Australia knows it’s a time to hit the reset button, tidy up their financials, and prepare for the year ahead. End of year accounting isn’t just about ticking boxes for tax purposes—it’s a chance to reflect, plan, and strategise for business growth.

For those of us who’ve lived through the EOFY grind, the importance of getting it right cannot be overstated. After all, the quality of your EOFY preparation sets the tone for the financial health of the upcoming year.

So, let’s break down the process to make it less of a headache and more of a strategic opportunity. Below, you’ll find a practical, step-by-step guide that will help you navigate the maze of EOFY tasks, so you can finish strong and start the new year with confidence.

Phase 1: Strategic Planning & Review (Well Before 30 June)

This phase is the calm before the storm. While many might be scrambling at the last minute, getting your strategic house in order well before June 30 can save you time and prevent costly errors.

Engage With Your Accountant Or Advisor Early

If you’ve ever been in the thick of EOFY, you know the panic that sets in when you realise you haven’t spoken to your accountant in months. I made this mistake a few years ago when I left everything to the last minute. My accountant was buried under paperwork, and I was frantically searching through receipts in the hope of finding everything we needed. It wasn’t a pretty sight.

A proactive approach is key. By reaching out early—ideally, months before 30 June—you’re giving yourself the time to ask important questions and avoid rushing through crucial decisions. Regular catch-ups throughout the year can also provide valuable tax planning advice, such as:

• Maximising deductible superannuation contributions (within annual caps).
• Prepaying eligible business expenses (e.g. rent, insurance, subscriptions up to 12 months in advance).
• Writing off bad debts and obsolete stock before year-end.
• Taking advantage of the instant asset write-off (note: for 2024–25, the threshold is $20,000 per asset for small businesses with turnover under $10 million—check current eligibility with your accountant).

By staying in touch with your accountant, you can ensure that your business is running as efficiently as possible, avoiding last-minute surprises that could eat into your tax savings.

Review Business Structure And Strategy

Take a moment to assess whether your current business structure (sole trader, partnership, company) is still the best fit. If your business has been growing, it might be time to consider restructuring. A few years ago, I was running my business as a sole trader, but after hitting a revenue threshold, I realised switching to a company structure would save me more on taxes in the long run.

It’s important to be mindful of any changes to your operations. A review of your strategy before the EOFY allows you to reset your business goals. This is also a perfect time to plan ahead for the new financial year. Whether it’s refining your marketing plan, reforecasting cash flow, or setting aside funds for employee superannuation and tax obligations, a solid plan can help you meet your targets and avoid surprises.

Implement Tax Planning Strategies

As any seasoned business owner will tell you, EOFY tax planning isn’t just about surviving the year—it’s about thriving by maximising every opportunity for deductions and reducing tax liabilities. The key is to plan ahead.

Here are a few strategies I’ve personally used, along with tips that could benefit your business:

Maximise Deductions By Prepaying Expenses

One of the easiest ways to reduce taxable income in the current year is by prepaying business expenses for up to 12 months in advance. Think of things like rent, insurance premiums, or subscriptions. I remember one EOFY, I prepaid for an entire year’s worth of insurance premiums, which helped me claim a substantial deduction that year.

Expense Type	Prepayment Opportunity	Tax Benefits
Rent	Prepay up to 12 months’ rent	Immediate deduction on rent paid in advance
Insurance	Prepay premiums (e.g., health, business, life)	Claim the full amount as an immediate deduction
Subscriptions (business software, etc.)	Prepay annual software subscriptions	Reduces taxable income for the current year
Interest on loans	Prepay interest (case by case)	May be deductible depending on the loan and timing rules – always confirm with your accountant. Note: ATO-charged interest (GIC/SIC) will not be deductible for amounts incurred on or after 1 July 2025

Manage Income And Debt

If you’re in a situation where you want to reduce your taxable income further, you might consider deferring income into the next financial year. This could be as simple as holding off on invoicing a client until after 1 July — but this only works if you’re on a cash basis. If you report income on an accruals basis, income is counted when earned, not when paid.

On the flip side, accelerating business expenses into the current year can further reduce taxable income. Another key strategy involves managing your debt. Some business owners I know who have had years of steady profits but faced a higher tax bill have opted to pay down existing loans before 30 June, reducing their overall interest payments.

Review Capital Gains

If your business has sold any assets this year and realised capital gains, it’s time to consider offsetting those gains with capital losses. I had a situation where we sold an underperforming asset, and by selling another asset at a loss, we effectively reduced the capital gains tax exposure. If you’ve held the asset for more than 12 months, don’t forget about the 50% Capital Gains Tax (CGT) discount. This could result in significant savings on your tax bill.

Review Superannuation Contributions

Another EOFY strategy that I’ve found immensely beneficial is reviewing and topping up my superannuation. As a business owner, it’s crucial to ensure you’re making the most of concessional contributions to reduce your assessable income while also building your retirement savings.

Make Concessional Contributions

Concessional contributions (before-tax contributions) to your super fund are tax-deductible and count toward reducing your taxable income. For the 2024–25 financial year, the concessional contributions cap is $30,000.

Utilise Carry-Forward Rules

If your super balance was under $500,000 on 30 June, you may be eligible to carry forward unused concessional cap amounts from the past five years. This can allow you to contribute more than the annual cap and still claim a deduction — a game-changer for both tax and retirement planning.

Submit A ‘Notice Of Intent’

Remember, if you’re making personal contributions to your super fund, you need to submit a valid Notice of Intent to Claim a Tax Deduction form to your fund (and receive acknowledgment) before lodging your tax return. This ensures you can legally claim the contribution as a tax deduction.

Phase 2: Finalising The Books (Around 30 June)

Once the planning is done, it’s time to ensure your financial records are accurate and all your business data is in order. The deadline is approaching, so the sooner you tackle these tasks, the smoother your EOFY will go.

Ensure Accurate And Up-To-Date Record Keeping

Accurate record-keeping isn’t just a good habit—it’s a legal requirement. Under Australian tax law, businesses must keep records of all financial transactions for a minimum of five years. If you’ve been keeping your receipts, invoices, and bank statements organised throughout the year, you’re already ahead of the game.

Separate Business And Personal Expenses

It’s essential to keep your business and personal expenses separate. This isn’t just to make things easier during EOFY, but also to ensure compliance with the Australian Taxation Office (ATO) rules. Having a dedicated business bank account and credit card makes this process much simpler. A few years back, I ran into trouble when I mixed personal and business expenses, which caused confusion when it came time to claim deductions. Lesson learned: keep it separate, and things will be much easier at EOFY.

Reconcile All Accounts

Reconciliation is the backbone of EOFY preparation. By matching your bank statements with your accounting software, you can ensure everything is in order before submitting your financial reports. This also applies to credit card statements, loans, and any other accounts involved in your financial processes.

Bank Reconciliation

Ensure that every transaction listed in your accounting software matches the corresponding entry in your bank statements. This might sound tedious, but it’s the key to ensuring your financial reports are spot on. I always set aside a couple of hours before EOFY to go over this, as it helps me identify any errors early, saving a lot of headaches.

Reconcile Liability Accounts

For businesses in Australia, liability accounts like GST, PAYG withholding, and superannuation payable need to be reconciled correctly. If these accounts are off, it could lead to discrepancies in your BAS (Business Activity Statement) filings or superannuation payments. Reconcile these liabilities well before the 30 June deadline to avoid penalties.

Manage Assets And Inventory

For businesses that deal with physical stock, this phase is crucial. You must ensure that your inventory count is accurate and that your assets are correctly valued and recorded.

Conduct A Stocktake

If you sell products or hold inventory, conducting a physical stocktake as close to 30 June as possible is essential. In my experience, this is often the most time-consuming task during EOFY, but it’s also the most important one.

• Preparation: Start by organising your stockroom, clearing up any clutter, and ensuring everything is clearly labelled. Make sure you have the necessary supplies—scanners, pens, and stocktake sheets, for example—before diving in. If you use a stock management system, it’s helpful to ensure that all stock movements are updated ahead of the count.
• Physical Count: Don’t rely on last year’s numbers or data from your system; physically count every item. This includes stock that’s in storage, on display, or even items in transit.
• Valuation of Stock: Once you’ve completed the stocktake, it’s time to value the stock. In Australia, the Australian Accounting Standards Board (AASB) requires inventory to be measured at the lower of cost and net realisable value. This prevents overvaluing stock, which could distort your profit and tax position. For perishable or fast-depreciating goods, this step is especially important.
  

Review The Asset Register

As part of your EOFY preparation, you’ll also need to update your asset register. This includes recording any new purchases, disposals, or write-offs of assets during the year. If your business has made significant capital investments, it’s important to calculate depreciation claims to maximise deductions.

• Depreciation Claims: In Australia, businesses can claim depreciation on most assets, including equipment, vehicles, and buildings. For the 2024–25 financial year, the instant asset write-off applies to assets costing less than $20,000 (per asset, excluding GST) for small businesses with an aggregated turnover under $10 million. Assets costing $20,000 or more need to be added to the small business simplified depreciation pool.

Note: The temporary full expensing (TFE) measure ended on 30 June 2023, so it no longer applies for 2024–25.

Finalise Payroll

Payroll is one of those areas where attention to detail is paramount. Ensuring everything is reconciled before EOFY will save you time when it comes to submitting your tax returns and making sure your staff’s records are up to date.

Reconcile Payroll Accounts

Start by ensuring that all payroll-related accounts—wages, superannuation, PAYG withholding—are reconciled. You’ll also need to confirm that all employee deductions, allowances, and bonuses are correctly accounted for.

Finalise Single Touch Payroll (STP)

With Single Touch Payroll (STP) now mandatory for all employers, it’s essential to finalise your STP reports by 14 July each year. This ensures your employees can access their income statements via myGov, which they’ll need for their personal tax returns. Make sure your STP data is complete and accurate before the deadline to avoid penalties.

Phase 3: Reporting & Lodgement (Post 30 June)

Once your financial year (often ending 30 June) is complete, you enter the lodgement/compliance period. This phase involves finalising your financial statements, preparing tax returns and other reports, and submitting them to the ATO.

Prepare Final Reports

• You’ll compile a Profit & Loss (P&L) statement, balance sheet, and supporting schedules (debtors, creditors, accruals, prepayments) based on accurate bookkeeping.
• Debtors (accounts receivable) and creditors (accounts payable) should be reconciled and accurately recorded as of 30 June, to present a true view of liabilities and assets.

Lodgement / Reporting Obligations & Deadlines

Report / Return	Who	Approx Due Date(s) / Conditions	Notes / Caveats
Individual / Sole Trader Income Tax Return	Individuals and sole traders	31 October (if lodging themselves)	If lodging via a registered tax agent, extended due dates may apply depending on prior compliance history, sign-up timings, etc.
Trust / Individual Lodgment via Agent	Trusts/individuals using tax agents	15 May (for many)	A concession allows lodgment by 5 June for many, subject to meeting eligibility criteria
Company Tax Return	Companies	15 May (for many June balancing companies)	If lodging via a tax agent, there might be additional time allowed; also, special rules apply for entities with prior year defaults or using substituted accounting periods
Business Activity Statements (BAS / GST / PAYG withholding)	GST-registered businesses	Quarterly or monthly as notified; e.g. Q4 (1 Apr – 30 June) BAS due 28 July	If you lodge via a BAS agent, extensions may be available.
Taxable Payments Annual Report (TPAR)	Businesses in certain industries (construction, cleaning, courier, IT, security, etc.) that pay contractors	28 August (online lodgement required)	Paper lodgement is no longer accepted after that date.
STP Finalisation	Employers under Single Touch Payroll	Generally early July	Employers must finalise payroll to report to the ATO that all wages, PAYG withholding, and superannuation are accounted for.
Superannuation Guarantee payments	Employers	By quarterly deadlines (e.g. 28 July, 28 Oct, etc.)	Payment of employee superannuation must meet deadlines to avoid the super guarantee charge.
Fringe Benefits Tax (FBT) Return	Employers offering fringe benefits	21 May	Many employers have to lodge and pay FBT in May.

Other Considerations

• Extensions / eligibility: Extended lodgement dates are not automatic — you must meet eligibility (e.g. prior compliance, sign-up by deadlines, no outstanding returns) to use them.
• No paper TPAR after 28 August: TPARs must now be lodged online after that date.
• ATO’s due dates for agents: The ATO publishes a “Registered Agent Lodgment Program” schedule each year that details when different classes of taxpayers (by size, prior compliance, etc.) must lodge.

Preparing for the end of the financial year is an essential task that every Australian business owner should take seriously. By following a structured approach to your EOFY tasks—from engaging your accountant early to ensuring your records are spot on—you can avoid common pitfalls and maximise your tax savings.

While it may seem like a daunting process, breaking down the tasks into phases makes it manageable and strategic. With proactive planning and attention to detail, you can not only comply with ATO regulations but also set your business up for success in the new financial year.

By making EOFY preparation an ongoing practice throughout the year, you’ll keep your business on the right track and free up valuable time for growth and new opportunities. So, get organised, take action early, and reap the rewards of a smooth and stress-free EOFY!