How businesses can close out FY24–25 on solid footing and start strong in FY25–26
Many Australian businesses are bracing for increased compliance scrutiny as the financial year draws to a close. The Australian Taxation Office (ATO) has flagged several key focus areas for FY24–25, including overdue tax debts, work-related expenses, capital gains, and rental income. Non-compliance in these areas can lead to substantial penalties, interest charges, and even legal action, as repeated late lodgements can result in increased fines, while unresolved tax debts could trigger garnishee notices or legal proceedings. This serves as a timely reminder to businesses of all sizes: take the end of the financial year (EOFY) seriously or risk facing serious consequences.
Businesses with inconsistent record-keeping, unclear financial workflows, or unpaid obligations are more likely to attract attention. The ATO has invested in advanced data-matching tools and artificial intelligence (AI) to cross-check reported income and deductions against third-party sources, meaning even minor oversights can trigger audit activity or delays in processing.
The most common pain points during EOFY tend to come down to two things: disorganised processes and incomplete information. It's easy to miss valid deductions when receipts are scattered across inboxes or stored on personal devices as manual reconciliation can take days for lean financial teams. Payments to suppliers can also slip through the cracks when approval workflows are unclear or not followed consistently. These issues might seem minor in isolation; however, they often reflect deeper structural problems in how expenses and invoices are managed.
Now is the time to close those gaps. Businesses should start by gathering complete records for income, expenses, assets, and liabilities. Finance personnel need to go beyond general ledgers and profit-and-loss statements, and carefully review reimbursement claims, subscription costs, software expenses, and travel records. The next step is to consolidate the data to get a single, accurate view of payments, especially if the business has used multiple systems to process payments or expenses.
It's important to also check whether claims align with ATO expectations. For example, the ATO has emphasised again that work-from-home deductions must reflect actual usage, not estimates. It also continues to highlight common errors in rental income reporting and capital gains declarations. These areas are under close watch, and discrepancies are harder to defend when documentation is patchy.
Compliance is only one part of the EOFY picture. Cybercriminals target finance teams with tax-themed scams at this time of year. According to the Australian Competition and Consumer Commission (ACCC), Australians lost more than $152 million to payment redirection scams in 2024, up from $91.6 million the previous year, making it one of the top five scam types by financial loss. This highlights the need for tighter controls. Business leaders must review who has approval access, how and where sensitive documents are stored, and the process used to verify vendor details. It's also critical to validate that everyone involved in payments or account management understands these risks and are trained to spot suspicious activity.
Businesses that want to reduce risk and simplify EOFY reporting can make immediate gains by automating expense and invoice management. Automation tools reduce reliance on spreadsheets and email chains while applying consistent rules and approval flows simultaneously, which helps teams process claims faster and with fewer errors. This gives businesses of all sizes clearer visibility into spending and more accurate data for compliance reporting and strategic planning.
Businesses can shift their focus to FY25–26 ahead once EOFY obligations are complete. Notably, e-invoicing will become mandatory for all Commonwealth agencies and their suppliers from 1 July 2025. Adopting this early can help businesses reduce processing times, cut operating costs, and improve cash flow.
The start of the financial year is the ideal time to step back and assess what's working and what needs improvement. Delays in approvals, hard-to-produce reports, or unclear spending are signs of deeper process issues. Now's the time to fix them. EOFY is an opportunity for businesses of all sizes to improve how they manage spending, reporting, and decision-making. Those that invest in better systems now will be better positioned to grow in the year ahead.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Otago Daily Times
2 hours ago
- Otago Daily Times
Butter proving to be a popular fundraiser
While the skyrocketing price of butter may be leaving a bitter taste in the mouths of some, one non-profit saw a golden opportunity. Southland Paws Rescue founder Amy Greig said the organisation made $1 profit on each of the 5560 blocks of butter it sold in its latest fundraiser. Ms Greig said it was the first time it had sold butter and it had been the most successful fundraiser to date. The orders for the 250g Westland Gold blocks started rolling in thick and fast after a post about it was placed on their social media page. "Word of mouth got around and people started ordering." Jingo and cheese rolls had been used to raise revenue in the past, but the butter was less work and easier to sell. One buyer ordered $1000 of butter while ironically, 500 blocks were ordered by staff from a local dairy processing factory. Ms Greig said several orders had been received from people who made cakes for others. Prices were initially marginally lower than supermarkets, but even from the time they first started receiving orders at the start of May, Westgold community fundraising prices had risen from $4 to $5.15. "I'd rather put that dollar that we got back into a local organisation for what we do . . . than letting that supermarket profit that dollar." Orders had to be prepaid and picked up once the delivery had been made because of the logistical challenge of storing pallet loads of butter. Funds raised paid for the care of the multitudes of animals the charity looked after throughout the year. While they had a good relationship with their vet, their bill still needed to be paid. Some animal healthcare expenses ran more than $1000. Leithfield School in Canterbury sold 10,000 blocks of the golden dairy bars in a recent fundraiser, RNZ said. Invercargill's Kaye's Bakery had been importing Australian butter by 10-tonne shipments to make its biscuits. Kaye's Bakery owner Luella Penniall said three years ago the company was paying $11 per kg — now it was up to $15. Stats New Zealand data shows prices have increased more than 65% in the 12 months ending at April 2025. Stats NZ also said dairy prices were the main driver for food price increases — increasing the food price index by 3.7%. The average cost for 500g of butter was $7.42, 12 months ago. Butter hit a record high of $7992 a tonne early in May before falling to $7821 in mid-May. By Toni McDonald
Otago Daily Times
3 hours ago
- Otago Daily Times
Dunedin collective to take ownership of teams
Mystery group to the rescue. After weeks of uncertainty, there is positive news for the Otago Nuggets and Southern Hoiho. In a statement released yesterday by the New Zealand National Basketball League, Sports Entertainment Group (SEN) says it intends to transfer ownership of the Nuggets and Hoiho "into the hands of a passionate collective of local Dunedin community supporters". It did not go further into the ownership structure or who was behind the passionate collective. The transaction is expected to be completed by the end of next month. SEN's Australian sponsorship team will continue to support both teams through to September 2028, the statement said. General manager of the Nuggets and Hoiho Angela Ruske said it was "incredibly good news for basketball in Otago". "The Nuggets and Hoiho are more than just teams — they bring our community together through high-energy entertainment, inspire our youth, and create meaningful pathways for local players, coaches, and officials. They also contribute economically by drawing supporters and teams from around the country to Dunedin. "SEN has done a very good job in laying the foundation, and there's a real sense of passion and purpose to build on that legacy and take both teams to new heights. "Having local ownership brings a deeper connection and commitment to our region," she said. In the statement, SEN chief executive Craig Hutchison said his organisation was pleased to be able to provide some certainty for the clubs' players, staff, stakeholders and fans. "We flagged that our aim was to sell the teams to leaders motivated to maintain and grow them within the Otago region — a region that loves its basketball and takes great pride in its national teams, backed by an amazing and passionate fan base. "We believe both clubs are in the perfect hands, with strong local support and a deep understanding of what these teams mean to the community." Transfer of the ownership is subject to approval by the NBL's commission. — APL
1News
10 hours ago
- 1News
Call to rethink tax on KiwiSaver
KiwiSaver members could be significantly better off if New Zealand adopted a taxation model similar to Australia's, an economist says. Simplicity chief economist Shamubeel Eaqub ran some numbers modelling a system similar to Australia's, where contributions and returns are taxed at 15%. In New Zealand, full tax is paid on income contributed to KiwiSaver, and returns in PIE schemes taxed at an investor's prescribed investor rate up to 28%. Eaqub said an "average" KiwiSaver investor starting now could end up $60,000 better off in nominal terms at retirement on a model similar to Australia's. If tax was not paid on contributions or returns, they could be about $1 million better off - and if only taxes on returns were removed the gain would be about $300,000. "In Australia, the context is there's some conversation about whether the tax breaks are too generous for richer people. It's not that it's perfect but the point is in other countries it's heavily incentivised for people to save in their private pension." ADVERTISEMENT But it was not in New Zealand. Kirk Hope, chief executive of the Financial Services Council, which represents KiwiSaver providers, said the Australian model was different because that country has a means-tested pension. "The tax break that occurs in New Zealand occurs when you retire, when you get national super... that is the equivalent of about $500,000. So I think it's hard to do a comparative analysis without acknowledging that there are significant differences between the schemes and what they are trying to achieve." Winter's here, supermarket spying, and TikTok's new feature. (Source: 1News) But he said if the tax on savings for New Zealanders was reduced it would give future governments more "fiscal options" in relation to superannuation. He said New Zealand previously had a system that was EET — or exempt, exempt, taxed, where contributions were tax-exempt, exempt from tax within the scheme and then fully taxed when withdrawn. The Tax Working Group in 2018 acknowledged that the change from that system had potentially created incentives for New Zealanders to direct savings into investments like houses instead. ADVERTISEMENT Hope said it would be expensive to adjust back to EET but there could be other changes that would be more affordable. The tax working group estimated that ignoring behavioural changes, it would cost $200m to $300m a year to move to a system where returns and withdrawals were not taxed, and $2.5b a year to move to an EET system. "The higher initial cost for an EET regime arises from the fact that there will be a substantial deferral period before significant amounts are withdrawn from the scheme, and thus taxed under the third 't'. Although these are very different initial costs, the costs will be the same in the long run on a net present value basis." Hope said providing different forms of tax incentives would be beneficial for savers. He said removing or reducing the employer contribution tax would be particularly useful for low-income people. Kernel Wealth founder Dean Anderson said New Zealand was one of the few countries operating a TTE — taxed contributions, taxed returns and exempt withdrawal — model. "Our future savings would be much better off under an EET approach, where we don't pay tax on the way in but on the way out. ADVERTISEMENT "With low savings rates in NZ, the government should be exploring everything in its powers to grow savings rates, which benefits NZ and Kiwis over the long term. "But it's not a surprise. The recent meek KiwiSaver policy announcement did all the hard work to announce a positive gradual increase to KiwiSaver contributions, yet they fell short by announcing a three-year policy rather than outlining a decade plus long policy of incremental KiwiSaver increases." Ana-Marie Lockyer, chief executive at Pie Funds, said KiwiSaver members were at a disadvantage compared to Australians because there was no upfront tax incentive or concession as in Australia to encourage them to contribute more. "Maybe consideration of a mid-tier flat tax rate on savings up to a certain amount would encourage savings." She said employer contributions were also taxed so investors lost the benefits of compounding, and investors paid tax on bonds and deemed dividends on global equities so they were effectively paying a capital gains tax. "So contrary to the government's stated goal of helping New Zealanders' grow their KiwiSaver balances, these factors mean New Zealanders have less incentives to make voluntary contributions and pay more tax on investment earnings, resulting in smaller balances at retirement relative to our Australian friends."
