It’s that time of the year again, when businesses large and small need to submit their end of financial year tax statements. Most business owners and finance teams would be familiar with the experience of working last-minute to compile and cross-check the necessary documents, including chasing those elusive expense receipts! But did you know that most of this manual work could be easily solved with Budgetly? Here’s how.
First things first, what does the end of financial year (EOFY) mean for most Australian businesses?
The Australian financial year starts on the 1st of July and ends on the 30th of June the following year. According to Australian law, all businesses are required to keep records of their financial transactions, which includes the income earned and expenses incurred. These records are then submitted to the Australian Taxation Office (ATO) in the form of a tax return, which will then determine how much the business should be taxed by the government.
Generally, the tax return lodgement due date for the majority of sole traders and partnerships would be on 31st of October, while the majority of companies' lodgement due dates would fall on the 28th of February. A detailed due date for businesses is available on the ATO website.
Submitting a tax return is often a stressful time for most businesses, as it usually involves a ton of paperwork. It typically involves:
- Trying to search for missing company receipts.
- Reconciling all employee transactions with the bank.
- Cross-checking employee transactions with the company’s financial statements.
- Manually keying in all transactions into an accounting software.
How Budgetly Can Help Businesses With EOFY Reporting
Fortunately, Budgetly’s prepaid corporate card is not just an ordinary preloaded card. Our cards come with a secure software that allows businesses to track, capture, and reconcile employees expenditure easily for EOFY reporting.
Receipts in One Place
Compiling physical receipts is hard work, and they are often misplaced, faded, or lost most of the time. Businesses are recommended by the ATO to keep at least 5 years of transaction records, and ensuring all those receipts are accounted for is difficult manual work. While the ATO does allow the submission of digital receipts, businesses would need a platform to capture and organise these receipts.
This is where Budgetly comes in handy. Using our prepaid corporate card, all employee transactions are automatically recorded into the software. Employees would only need to capture a picture of the receipt or upload an existing receipt photo onto the app for it to be recorded.
Once uploaded, the business owner and finance personnel are able to view the transaction along with its receipts for easy EOFY reporting.
Seamless Bank Reconciliation
Submitting EOFY tax returns requires businesses to reconcile their expenses, which is ensuring that their business credit card transactions match the company’s financial statements. However, there are many challenges that come with trying to manually reconcile your corporate credit cards. Manually cross-checking expenditures may result in human error, which results in even more money lost for businesses.
With Budgelty, business owners can set and allocate budgets to their teams, which gives them better control of company expenditure. Under the ‘Transactions’ dashboard, all transactions are pre-filled with dates, merchant names, and budget categories. With a pre-set budget and the right receipts, businesses will never have to worry about reconciling transactions for EOFY.
Real-time tracking of Finances
One of the biggest challenges of EOFY reporting is the inability to efficiently track company expenditure. Oftentimes, there are discrepancies between what appears in the financial statement versus what is actually spent, and businesses end up spending more than budgeted on a certain vendor.
Real-time tracking of expenditures not only gives businesses owners bigger visibility to where money is spent, but it also eliminates any discrepancy on the company’s financial statements.
With Budgetly, business owners and finance personnel can view the last 5 company transactions on their dashboards. These transactions are updated immediately as it happens, giving business owners the ability to monitor and change budgets immediately and as needed.
Integration with Accounting Software
When submitting tax returns, businesses are required to provide a copy of their accounting or bookkeeping program files. Small businesses often do this through accounting software like Xero. An expense management solution like Budgetly that integrates with accounting software like Xero means that less time is spent on manually searching and tracking information.
Budgetly’s platform allows businesses to synchronise employee spending with Xero and easily map Budgetly’s expenditure categories to Xero’s accounts. By categorising expenditure to accounts such as R&D, businesses can also use it as valid documentation to claim back expenses during tax reporting.
In other good news for businesses, the Australian government will allow eligible small businesses can receive up to $1 billion in tax breaks for digital spending. This includes Budgetly!
Tax time can be stressful for most businesses, but it doesn't have to be. You can watch a recorded demo or schedule a live demo with one of our sales representatives to find out how our prepaid corporate cards can help simplify your expense management process and ultimately ensure hassle-free EOFY reporting.
