We’re also a startup business at Legal123.com.au – just like you. And so as we approach the End of the Financial Year we’d thought we’d post some helpful advice about what’s on our “to do” list with a due date of 30 June fast approaching:
1. Review your services
Pre-paying expenses is an often repeated end-of-year tax strategy so pay as many of your expenses pre-30 June to minimize your tax bill. This is one of the more obvious items you are likely already doing.
But as an online business we use a lot of subscription-type services, which are mostly billed monthly to a company credit card. These expenses are usual for most businesses: web hosting, video hosting, website analytics packages, social media monitoring services, backup plans, etc.
However, most of these services offer discounts for committing to an annual subscription – in the order of 10-15 %. It’s worth checking out and this is the time to do it.
So we reviewed all of our monthly subscriptions and services. First of all, we made sure we were going to stick with the service and if not, found an alternative service or dropped the activity entirely. Then we checked and applied for any annual discounts. Dollars saved are dollars made.
2. Consider cloud accounting now
At Legal123, we actually moved onto cloud accounting 2 years ago. We like to be on the cutting edge. But this made such a huge difference to our business, we think it is worth mentioning for this year.
We can’t speak highly enough about cloud computing. For us the advantages were threefold:
- No spreadsheets and end-of-year panic
- Better communication and up-to-the-minute advice from our accountant
- Real-time reporting and knowing exactly where we are financially
If you’re not using Xero, you should be. Or a similar cloud based service. And if you’re thinking of using Xero, get ready and do it now. Transferring over at the beginning of the financial year will make your life a lot easier.
As it was, we transferred over 2 months after the year started and there’s quite a lot of work importing transactions from bank accounts, PayPal, etc. A lot of this could have been avoided with a neat and tidy switch over on 1 July.
3. Outsource projects
Another part of the pre-paying expenses idea and also taking advantage of the “end of year get it done now” euphoria that small business owners experience pre-30 June.
I don’t know about you, but I love that buzz. The rush to get things done. Like the week before going away on a well-earned vacation. Go, go, go.
We’ve got 6 or so smallish projects that have stalled. Plus we’re in the middle of a website re-design. It’s a great time to knock those projects over now.
Publish the project online – we use Upwork/eLance and 99designs – pick a freelancer, give them all the information they need and let them get the job done. And don’t forget to ensure you pay their costs pre-30 June.
4. Purchase small assets
As a 100% online business we’re surprised how little we spend on office consumables, etc. Almost all our documentation is electronic, we share files, send email (sometimes with massive attachments), almost never go into the Post Office, and we hold video-Skype meetings rather than battle rush hour traffic.
But we still needed better wi-fi in one of our back offices –so it’s a great time to buy a wi-fi repeater. We also wanted to upgrade our business iPads and every year we upgrade our computers – so off to the Apple store. And we thought we’d also ‘pre-load’ our online advertising budget – probably our biggest consumable expense (such is the “new” economy).
That’s it. Not a lot, but worth doing a check around the office to see what needs upgrading or pre-paying and doing it now.
5. Review financials and plan for next year
Lastly, we always have a mid-June discussion with our accountant. Just to ensure they know the lay of the land, there are no surprises, they can confirm tell the Superannuation and other payments that need to be paid, etc.
And of course they can just log into our Xero cloud accounts and see everything for themselves. Brilliant. It has saved a lot of time and money, ours and the accountant’s.
But it’s also a good time for us to review the whole year, assess progress. We don’t have set budgets, but we do have a very clear strategic direction and financial goals, so it’s good to review those.
And then the fun stuff – planning the next year and visualizing what new products will we add, which to get rid of, strategy changes, staffing and where to find those new members of the team.
Lots to plan … so time to get down to it!