The end of a financial year can be a scary time for many salon, spa or clinic owners. It can be hard to stay on top of everything while continuing to run your business, and trying to reconcile an entire year’s worth of finances if it wasn’t managed properly can feel impossible to some.
But, did you know there are lots of things you can do throughout the year to stay on top of your finances, so that when the end of financial year rolls around again, it’ll be a breeze!
Here are 5 tips you can do throughout the year to help you manage your finances in preparation for the end of the financial year so you can start to feel cool, calm and collected come tax time.
1. Connect your salon software with your accounting software
Connecting your salon software to your accounting software will save you time and give you a better understanding of your business’s profit and loss. With Kitomba Salon and Spa Software, you can connect Kitomba to your daily feed in Xero to be able to monitor your end of day money more easily and streamline your processes.
2. Download the Xero app onto your phone
Every time you make a purchase, take a photo of your receipt and upload it into Xero. It only takes a few minutes but will save hours and hours of pain come tax time. Also, the receipt can be allocated to the bank feed transaction so everything is accounted for if you’re ever audited.
3. Allocate your expenses weekly
When you let all your expense allocations pile up, it’s hard to remember what you purchased for $47, four months ago. Allocating weekly gives you the opportunity to ensure no double payments are coming out of your account and helps you determine which parts of your business are responsible for which costs. This will help reduce your stress levels come tax time as you know exactly where your money is going.
4. Pay your tax weekly
Some people recommend a tax saving account, but for many of us, if we see the money there we like to spend it. By setting up an automatic payment to pay your tax and superannuation weekly come tax time you will not be hit with a huge bill that you can’t afford to pay.
5. Claim your business expenses to pay less tax
At tax time, you need to pay tax on your profit, which is your income minus the business expenses you can claim. That means that the more expenses you can claim, the less tax you have to pay. Don’t be afraid to run a profit!
This is particularly important to do because if you ever decide to sell your business, on paper it’s worth nothing unless you can demonstrate profitability.
Here’s one more bonus piece of advice. Before every single purchase ask yourself if you need or want it. Do you need to purchase this for your business to make a profit? If the answer is no, then you likely do not need it. The simple act of checking in with yourself and asking this question will help transform your finances.
By implementing these simple tips, you will save time, money and hopefully start feeling more empowered when it comes to your finances.
If you want to learn more about using Kitomba to make your end of the financial year less stressful, read how to use Kitomba for the end of the financial year.
- Are you being paid what you’re worth?
- How to take the stress out of the end of the financial year
- Small changes that can have a big impact on your finances
Editor’s note: This blog was originally published on 23 March 2020 and has been updated on the 1st July 2023 for relevance and comprehensiveness.