A Guide to Ending Your Financial Year

Think about how society treats the end of a calendar year. For many people, the end of a year signals new beginnings. It's the time of New Year's resolutions and a renewed commitment to self-improvement. The same can't be said about the end of a financial year. 

For the average person, the fiscal year starts and ends with no ceremony or plans to improve their financial situation. But as the growing popularity of side hustles encourages people to create another income stream, the need to be business-savvy is more important than ever. 

Most of us know the basics of entrepreneurship: draft a precise business plan, get business insurance to protect your assets and don't expect overnight success. But can we honestly say we know as much as we should about the end of the financial year? 

Here are a few tips you should follow to make sure your business stays on the right side of the taxman:

• Keep detailed records of your business' assets, liabilities and expenses. Instead of keeping slips and receipts in a file, get into the habit of scanning and capturing them as part of an electronic accounting system. 

• Accounting and taxation aren't things you can learn on the job. If you don't have these qualifications, it's in your best interests to hire a professional to help you prepare and file your business' income tax return.  

• You thought filling a personal tax return was a nightmare? Wait till you hear what business owners have to go through. First, they file a provisional tax return six months into a tax year, then another one at the end of the tax year. This is followed by a voluntary submission and top-up payment six months after the end of the year.
  
  The good news is this: making all those provisional returns and payments means you have less work to do when it's time to submit an annual return. That’s why hiring a professional accountant could work in your favour.

• Plenty of businesses barely break even in the early stages. If you see a cashflow crisis approaching, resist the urge to use the income tax money you owe SARS to cover operational expenses. Have an emergency fund on standby for times when business is not going too well. 

• If it's been a while since you’ve filed a corporate income tax return, you're probably worried that you owe SARS a lot of money. Ignoring the problem won't make it go away. Get on the phone with an accountant and find out how much you might owe, then contact SARS. The longer you put this off, the higher your penalty will be. 

Owning a business gives you the freedom to work and earn a living on your terms. With Miway Business Insurance, you’re able to add MiBusinessAssist to your policy, which will give you access to highly-skilled financial advisors who can assist you with basic financial counselling, formal debt review, financial planning, tax returns and debt wellness or counselling. 

Make sure your business is in order towards the end of the financial year so you can run it efficiently and live your way.