Could one hour reviewing last financial year’s performance save you thousands more over the next 12 months?
With another financial year behind you, now is the best time to take stock, while the details of how your business performed are still fresh. The decisions that make next year easier tend to be the ones made now, not in the rush towards June.
A short review of what worked, what didn’t and where the pressure points were, will give you a clear picture of where to focus your time, money and effort this year. Setting time aside now to reset and putting the right habits in place pays off across the whole year.
Waiting until tax time or the next BAS to uncover problems usually means reacting to them instead of planning around them. A few proactive steps now, including tax planning and regular accounting support can improve cashflow, reduce surprises and support better decisions throughout the year.
Here are some practical tips to help you start the new financial year with confidence.
Understand your financial starting point
Before charging into the new financial year, take a moment to understand where your business actually landed last year. Knowing what’s worked (and what hasn’t) gives you a much stronger starting point than simply rolling into another 12 months.
Review last year’s Profit and Loss (P&L) statement to understand how your business performed over the past 12 months. Then look at your current cash position to understand what your business can realistically do next.
It’s also worth looking at the balance sheet, not just the P&L. Before chasing more sales, look at your working capital – that’s usually where cash gets tied up. Reducing excess stock, managing when you pay suppliers and getting paid sooner, can free up cash flow.
Just as importantly, make sure you’ve closed the year properly, completing any outstanding year-end obligations as part of your EOFY tax planning. These include:
- Finalising Single Touch Payroll (STP) by 14 July
- Paying June quarter superannuation
- Completing any tax planning strategies before they expire
If your profit has shifted over the past year, check whether your PAYG instalments still reflect reality as part of your ongoing tax planning. Paying more tax than necessary means your cash is sitting with the ATO, while paying less can leave you with a larger bill at tax time. If you reduce your PAYG instalments to less than 85% of your actual tax liability, the ATO may charge interest on the shortfall. Make sure any variation is based on a realistic estimate of your full-year income.
In plain English; don’t reduce your PAYG instalments unless you’re confident your profits will actually be lower, because you could end up paying interest.
Focus on cashflow, not just profit
It’s one of the most common traps in business: seeing a healthy profit on paper but wondering why the bank balance feels much tighter.
Cash and profit are not the same thing. The gap between the two is your working capital cycle plus the items that never touch the P&L – loan principal, capital purchases and your own drawings.
Revenue tells you how busy you’ve been. Cashflow tells you whether you can pay the bills next week. Profit is what’s left for you and tells you how successful you’ve been.
Healthy cashflow is what keeps wages paid, suppliers happy and the doors open. A profitable business can still run out of money, so it’s important to watch both.
The good news? Improving cashflow usually isn’t about one big change, it’s about getting the basics right consistently.
- Prepare a rolling 13-week cashflow forecast to spot the tight patches before they arrive
- Invoice customers promptly
- Follow up overdue invoices early
- Set clear payment terms and stick to them
- Consider deposits or progress payments for larger projects
- Keep separate funds aside for GST, PAYG and superannuation so those liabilities never blindside your bank account
- Plan major purchases around your available cash, while also considering any available tax deductions
A simple forecast won’t predict everything, but it gives you time to act. Your accountant can also help you build realistic cashflow forecasts and identify opportunities to improve working capital before problems arise.
Pay yourself properly
When money is tight, it’s tempting to transfer money from the business account whenever you need it. But treating your business account like a personal ATM can create tax headaches, cashflow problems and, for companies, potential Division 7A issues. Money you’ve borrowed from your company isn’t always tax-free. If it isn’t repaid or covered by the right loan agreement before your company’s tax return is lodged, it could be treated as a taxable dividend.
Instead, have a clear plan for how you’ll pay yourself. Whether that’s wages, dividends or a combination will depend on your business structure, but the key is to make it intentional, not ad hoc. If you’re paying dividends, check the company’s franking account balance. It determines how much of the dividend can include franking credits.
Just as importantly, make sure your own income doesn’t leave the business short of cash. Your business still needs enough working capital to cover wages, suppliers and upcoming tax, GST and super obligations.
Review your remuneration every 3–6 months to make sure it still suits both your personal needs and the financial position of the business.
Build better financial habits
Most financial headaches don’t appear overnight. They build up through small tasks that get pushed to “later”.
The businesses that stay on top of their finances aren’t necessarily doing anything extraordinary; they’ve simply built habits that stop little issues becoming expensive ones.
It’s much easier to adjust course in July than it is in May when EOFY is only weeks away. Some simple practices include:
- Reconciling your accounts regularly instead of waiting until BAS time so your numbers stay current and decision-ready
- Keeping personal and business expenses completely separate so tax claims and deductions are smoother
- Setting aside GST, PAYG withholding and superannuation as money comes in so it never feels like “your money,” and the liability never blindsides the bank
- Tracking your debtor days and following up outstanding invoices weekly, so cash keeps coming in and slow-paying customers aren’t funding their business with your money
- Checking your cashflow forecast monthly so your profit on paper never masks an empty account
- Staying informed about tax and regulatory changes throughout the year through regular accounting support (or our newsletter) to plan for rule changes, not react to them
Completing small actions consistently when they arise is far easier than dealing with all of them later.
Stay ahead of regulatory changes
The beginning of a financial year often brings important legislative updates – 2026 definitely did.
This year, businesses should review their payroll systems and budgeting to ensure they’re prepared for changes including:
- Payday Super requirements from 1 July 2026. Super now must reach your employees’ funds within 7 business days of each payday, not quarterly
- If you used the ATO’s Small Business Superannuation Clearing House, you’ll need to switch to another Super Stream-compliant clearing house or payroll solution, as the service has now closed. This is particularly important with tighter Payday Super requirements coming into effect
- The National Minimum Wage and modern award minimum wages increase from the first full pay period starting on or after 1 July. Check whether your pay rates meet the new minimums and what the rise does to your margins
- The Super Guarantee remains at 12% (it stepped up to 12% on 1 July 2025), so confirm it’s correctly set in your payroll and built into your wage-cost budget
We’ll flag any other ATO rate and threshold changes that may apply from 1 July in our newsletters – subscribe to stay informed.
Understanding these changes early allows you to adjust your budgets, pricing and payroll processes before they begin affecting your business.
Review, reset and plan ahead
Good tax planning isn’t something that only happens in June and having a plan beats hoping for the best. Reviewing your business performance early in the financial year can take the pressure off next year.
Take time to analyse which products, services or jobs delivered the strongest results last year. Rank them by contribution margin or job-level profitability rather than revenue alone – the two often disagree once wage and operating costs are considered. That’s usually where the real opportunities to lift profitability sit.
Building both an annual budget and a cashflow forecast gives you a clearer picture of what’s ahead, while reviewing finance costs, subscriptions and recurring expenses may uncover opportunities to improve profitability.
Finally, set a small number of clear, measurable business goals. Having direction makes it much easier to make confident financial decisions throughout the year.
Start the year with confidence
Every business is different, and the right financial strategies depend on your industry, structure and goals.
If you’d like to start the new financial year with confidence, Business + Numbers provides proactive accounting support and tax planning to help you review your financial position, strengthen your cashflow and ensure your business is set up for success in the year ahead.
Get in touch with Business + Numbers to discuss how we can help your business make the most of the new financial year.
