5 EOFY financial watchouts small business owners should avoid

Summary

End of financial year (EOFY) can be a minefield for small business owners, with more than half admitting past errors. Discover the top five mistakes to avoid, from lost receipts and missed deductions to common misconceptions, plus easy fixes to breeze through the financial year-end with confidence.
 

EOFY stress = mistakes

As EOFY approaches, small business owners often find themselves caught in a whirlwind of paperwork, numbers and the occasional panic attack. Rushing on tasks and stress can lead to one, unfortunate thing: errors. According to a 2024 survey by Xero, 56% of small business owners have confessed to committing EOFY blunders. But we can learn from their mistakes. Here are five common pitfalls to avoid and fixes to implement, ensuring you sail through EOFY with a smile.
 

EOFY watchout: losing important receipts

Easy fix: adopt a digital filing system

Receipts in drawers, receipts in the car, invoices on your desk, invoices in your email – keeping track of all your paperwork is essential to ensure you don’t misplace any important documents and forget to include it in your tax deductions.

To prevent this, establish a straightforward filing system that works for you – while a well-organised physical filing cabinet has traditionally done the job, these days there are many digital solutions available with cloud storage, like Xero or MYOB, so you can access your records from anywhere. Upload receipts on the go, so you can make deductions immediately and throw away the paper trail.
 

EOFY watchout: forgetting significant tax deductions

Easy fix: record deductions as you go

Tax deductions and instant asset write-offs can significantly save you money. To avoid leaving money on the table, make it a habit to log deductions as you incur them, perhaps with the help of an app designed for expense tracking or accounting software that tracks deductible expenses automatically (the Australian Taxation Office (ATO) has a free myDeductions app). 

It’s also a good idea to familiarise yourself with the types of deductions you can claim, such as office supplies, travel expenses and business-related machinery. Consulting with a tax professional can also provide valuable insights and ensure you maximise your deductions, boosting your bottom line.
 

EOFY watchout: using incorrect figures in tax returns

Easy fix: use a reliable software and double check your figures

Incorrect figures can lead to costly errors and major headaches. To mitigate this risk, always double-check your calculations and consider using reliable accounting software to automate and verify your financial data. 

Regularly reconcile your accounts to catch discrepancies early, and don’t hesitate to seek help from a qualified accountant if you need assistance. Implementing periodic financial reviews throughout the year can also help identify potential errors before they escalate, reducing the risk of inaccuracies during EOFY preparations.
 

EOFY watchouts: deleting crucial financial records

Easy fix: regularly back-up your data

Most of us are familiar with that stomach-curdling feeling of accidentally deleting something important. But when it’s your financial records – it's a nightmare for both your profits and your tax agent. 

Protect your business by implementing a robust back-up strategy. Use both local and cloud-based solutions to regularly back-up your financial data, ensuring that you can recover lost information quickly and efficiently. Set up automatic back-ups so you can set and forget!
 

EOFY watchout: waiting until the end of June to prepare your paperwork

Easy fix: start early and plan ahead

Procrastination is the enemy of smooth EOFY preparation, yet many small business owners wait until the last week of June to get all their admin done. The key to avoiding this trap is to start early. Set clear goals and create a timeline for your EOFY tasks well in advance. Break down the process into manageable steps to tackle each month. And consider consulting with a tax professional, who can schedule in regular check-ins to keep you on track. 
 
By sidestepping these EOFY watchouts, you’ll save time, money, and a fair amount of sanity. With preparation and a touch of wit, small business owners can transform EOFY from a dreaded deadline into a seamless process.