Xero, the global small business platform, has released research highlighting how Australian small businesses think and feel about the end of financial year (EOFY).
The survey of more than 1000 small business owners and decision makers “revealed 71% consider this time of year stressful, and 83% find one or more aspects overwhelming.”
The top source of overwhelm “during EOFY was found to be navigating tax compliance (33%).”
This was closely followed “by gathering financial data (32%), the time investment required (30%), staying on top of receipts (28%), and balancing financial deadlines with day-to-day operations (26%).”
Anthony Drury, Managing Director ANZ, Xero, said:
“Our new research demonstrates that EOFY can be a difficult period for small businesses. It adds greater pressure on time, resources, and is compounded by the challenges they are facing in the current economic climate — from the rising cost of living, to a drop in small business labor productivity. Our aim for this research is to highlight these common pain points around EOFY preparations, so we can provide practical tips for small businesses to use right now.”
More than half (56%) of small business owners “confessed to making a mishap in their past EOFY preparations.”
The most common mishaps were “misplacing important documents or receipts (32%), forgetting to claim a significant deduction (31%), entering incorrect figures that lead to tax errors (14%) and accidentally deleting crucial financial records (11%).”
When asked what the biggest EOFY misconceptions were, respondents “selected ‘it’s just a one day event’ (47%), ‘it’s easy to prepare for’ (43%) and ‘it’s only about taxes and paperwork’ (42%).”
Drury continues:
“We always encourage small business owners to connect with their accountant or bookkeeper throughout the year to make EOFY preparations easier. EOFY highlights how important those relationships are as advisors can help to alleviate pressures, from managing records and financial statements to understanding tax compliance.”
As noted in the update:
“Complementing your accountant or bookkeeper’s advice with digital tools is an excellent way to automate repetitive tasks such as receipt capture, invoicing and bank reconciliation, and help manage the risk of errors. Xero’s research shows how powerful digital adoption can be in terms of boosting productivity outcomes, as it allows small business owners to spend less time labouring on manual tasks and more time focusing on running their business.”
