Christmas might still feel a little way off, but for business owners, the final few months of the calendar year can move quickly. Before long, attention shifts to finishing projects, managing the end-of-year rush, preparing for staff leave and trying to wrap everything up before the Christmas break.

And somewhere amongst all of that, the numbers can get pushed aside. Before the year gets busier, it may be worth taking some time to understand where your business currently stands from an accounting and tax perspective. You’re already several months into the financial year, which means there is useful information available about how the business is performing and where your tax position may be heading.

So, before you start making your Christmas list, here are seven things worth checking twice.

1. How Is Your Business Actually Performing?

A busy business can feel like a successful business. More customers, more invoices and more work coming through the door are all positive signs. But they don’t necessarily tell you how the business is performing financially. Revenue may have increased while wages, supplier costs and other expenses have increased alongside it. You may be turning over more than last year without seeing the same improvement in profit.

This is where reviewing your year-to-date numbers can be useful. Rather than looking at revenue alone, consider what has happened to profitability, expenses and margins. Comparing these figures against your expectations, budget or the same period last year may help highlight where the business is performing well and where something may have shifted.

If the numbers aren’t where you expected them to be, understanding why now gives you more time to investigate before the end of the financial year.

2. What Is Your Tax Position Starting to Look Like?

Tax planning is often associated with the months leading up to 30 June, but that doesn’t mean your tax position should remain a mystery until then.

By October, several months of the financial year have already passed. If your business has experienced significant growth, a change in profitability or other major financial changes, your expected tax position may look different too. Having an early indication of where things are heading may make future tax obligations easier to prepare for.

It can also provide an opportunity to identify areas that may require further discussion with your accountant rather than discovering them much closer to EOFY.

You don’t necessarily need to have every answer before Christmas. The important part is understanding whether your position has changed and what that could mean for the months ahead.

3. Are Your PAYG Instalments Still Appropriate?

PAYG instalments help businesses and individuals progressively pay tax on expected income throughout the year.

However, business performance doesn’t always remain consistent from one year to the next. Your revenue may have increased significantly. Profitability may have declined. You may have lost a major client, expanded the business or experienced other changes that affect your expected taxable income.

If your circumstances have changed, it may be worth reviewing your PAYG instalments with your accountant to understand whether they continue to reflect your current position. Any decision to vary PAYG instalments needs to be considered carefully, as consequences may apply where instalments are reduced too far.

The goal isn’t simply to pay less now. It’s to understand whether what you’re paying throughout the year remains aligned with the financial position of the business.

4. Do You Have Outstanding ATO Obligations or Tax Debt?

Outstanding tax obligations can be easy to push down the priority list when there are more immediate demands on the business.But they don’t disappear over the Christmas break.

If your business has existing ATO debt or overdue obligations, understanding exactly where things stand before the end-of-year rush may help prevent further uncertainty. How much is outstanding? Are payments being made under an existing arrangement? Are there upcoming obligations that could add further pressure? Has correspondence from the ATO been addressed? Ignoring tax debt can allow the situation to become more difficult to manage over time.

Reviewing your position with your accountant may help you understand the obligations you currently have and what options may be available based on your circumstances.

5. Are You Planning Any Major Purchases or Investments?

A new vehicle. Equipment. Technology. Machinery. A fit-out. There are plenty of reasons a business might make a significant purchase before the end of the calendar year.

But “Can I claim it?” shouldn’t be the only question driving the decision. Different assets and expenses can receive different tax treatment, and spending money doesn’t automatically mean you’ll receive an immediate deduction for the full amount.

There is also the broader financial impact to consider. A purchase may have a tax benefit while still requiring a significant amount of cash to leave the business. If you are considering a major purchase before Christmas, speaking with your accountant beforehand may help you understand the potential tax treatment and how the decision fits within the wider financial position of the business.

6. Has Anything Significant Changed in Your Business?

Think back to where your business was at the beginning of the financial year. Does it still look the same?

Perhaps you’ve brought in a new shareholder, expanded into another location, added a new revenue stream, purchased significant assets or experienced substantial growth. Businesses evolve, but their accounting and tax arrangements don’t always evolve with them.

Changes to ownership, operations, income or future plans may create new considerations around tax and business structure. In some circumstances, arrangements that suited the business previously may warrant another look. That doesn’t mean every change requires a restructure. It simply means significant developments within the business are worth discussing with your accountant so you can understand whether there are any accounting or tax implications you should be aware of.

7. What Are You Planning for the Second Half of the Financial Year?

Not everything worth discussing with your accountant has already happened. Some of the most valuable conversations can be about what you’re planning to do next.

Maybe you’re considering hiring, expanding, purchasing a commercial property, investing in equipment, bringing in another owner or making another significant change to the business. These decisions can have accounting, tax and broader financial implications.

Discussing major plans before they happen may give you more opportunity to understand those implications and consider how the decision fits within your existing arrangements. Instead of reaching tax planning season and explaining what happened six months earlier, your accountant has an opportunity to understand where you’re heading before you get there.

Before You Switch Off for Christmas

There will always be another report to review, another number to check and another task competing for your attention. The goal isn’t to have absolutely everything resolved before Christmas.

It’s to avoid heading into the break without a clear understanding of where your business stands. Reviewing your year-to-date performance, expected tax position, PAYG instalments, ATO obligations and upcoming business decisions may help identify areas that require attention while there is still plenty of time to address them. Then, when the Christmas break finally arrives, you can hopefully switch off knowing you’ve already checked the important things twice.

How Carbon Accounting & Tax Can Help

Your accountant can play an important role beyond preparing returns and meeting annual tax obligations.

At Carbon Gympie, our Accounting & Tax team works with business owners throughout the year to help them understand their financial position, tax obligations and the accounting implications of the decisions they’re considering.

If you’d like to understand how your business is tracking before the Christmas rush begins, get in touch with your local Carbon team.

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