EOFY Checklist: Prepare Your Restaurant for the End of Financial Year

With the end of financial year (EOFY) fast approaching, it’s essential to set aside time to go through all of your restaurant financials and ensure that your paperwork is in order to prepare for the year ahead. 

EOFY can be stressful for business owners, so we’ve nailed down all the steps you need to take to ensure you’re ready for tax time and to help keep your financials in check for the coming year. 

Let’s dive in.

• Get your paperwork in order
• Update your financial reports
• Conduct a stocktake
• Research which tax deductions you can claim
• Audit your assets
• Finalise payroll and process superannuation payments
• Consult with a professional

1. Get your paperwork in order

The first step in preparing for EOFY is to prepare all the paperwork you’ll need to complete your tax return and financial statements. 

Firstly, you’ll need to gather all the relevant financial records for your restaurant, including profit and loss statements, balance sheets, and cash flow statements for the entire financial year. These documents will provide a comprehensive overview of your business’s financial performance, liquidity, and overall financial position.

In addition to these financial statements, it is essential to compile all of your records of sales and purchases (including invoices, receipts, and bank statements) to substantiate your transactions and provide evidence of your restaurant’s revenue and expenses.

Finally, you’ll need to gather any documentation related to tax compliance. This includes copies of your Business Activity Statements (BAS) filed throughout the year, PAYG summaries for employees, and records of superannuation contributions made on behalf of employees.

By meticulously organising and compiling these documents, your restaurant will be in the best position to facilitate a smooth EOFY process.

2. Update your financial reports

Once you’ve gathered your financial paperwork, the next step is to update your financial reports.

Profit and loss statements

Your profit and loss statement summarises your restaurant’s revenue, costs, and expenses, allowing you to accurately assess your profitability. Ideally, you should update this every month, so for year-end, you’ll need to ensure you have added in all the relevant numbers from July 2023 to June 2024.

Balance sheet

Your balance sheet provides a snapshot of your restaurant’s financial position at a specific point in time. Balance sheets include assets (e.g., cash, accounts receivable, inventory), liabilities (e.g., loans, accounts payable), and equity (e.g., owner’s equity, retained earnings). Updating the balance sheet is crucial for assessing your restaurant’s overall financial health and solvency.

Cash flow statement

Cash flow statements track the cash that flows in and out of your restaurant. It’s important to regularly update this document throughout the year to understand how much money your restaurant generates.

General ledger

The general ledger contains all the accounts and transactions recorded throughout the financial year. It includes details such as sales, purchases, expenses, and payroll. You should ensure that your restaurant’s general ledger is up to date and accurately reflects all financial activities.

By updating and organising these financial documents, you can ensure that the financial records for your restaurant are accurate, up-to-date, and compliant with Australian accounting standards. In turn, this will help you smoothly navigate through your EOFY obligations.

Remember: Working closely with a qualified accountant or tax professional is recommended to ensure proper preparation and adherence to regulatory requirements.

3. Conduct a stocktake

The next step in preparing your restaurant for the EOFY is to perform an end-of-financial-year stocktake.

Determine the value of your inventory

Your inventory represents a significant asset for your restaurant, and its value directly impacts the financial statements and profitability of your business. Therefore, conducting a stocktake will allow you to accurately determine the value of your inventory. In turn, this information will help you accurately prepare your financial statements, calculate your cost of goods sold, and determine the overall financial performance of your restaurant.

Identify discrepancies

An end-of-year stocktake also helps identify any discrepancies or irregularities in your inventory levels. By comparing the physical count to the inventory records, you can uncover any instances of theft, spoilage, or inaccurate record-keeping.

If left unnoticed, these discrepancies can lead to distorted financial statements and inaccurate financial performance analysis, which can impact your business come tax time. Therefore, conducting a thorough stocktake will allow you to address and rectify any discrepancies promptly, improving inventory control and minimising the risk of losses.

Improve your process for the new financial year

Lastly, an end-of-financial-year stocktake provides valuable insights for future inventory management and purchasing decisions. By analysing your stocktake results, you can identify trends, assess the popularity of certain items, and evaluate the effectiveness of your ordering and stocking practices.

This information will empower you and your team to optimise inventory management, reduce wastage, and make informed decisions about menu offerings and supplier relationships.

4. Research which tax deductions you can claim

You’ll likely be able to claim tax deductions for any business expenses you made this financial year, as long as they directly relate to earning your income.

For example, you may be able to claim deductions if your restaurant:

• Set up a website
• Has motor vehicle expenses or uses diesel fuel
• Has travel expenses
• Uses equipment, such as kitchen appliances, tools or technology, such as POS systems.

Remember: you must have records, such as receipts, to prove the expenses that you claim as business deductions.

5. Audit your assets

If you purchased a new asset (such as a fridge, freezer, tech equipment, etc.) for your restaurant this financial year, each asset will be eligible for a tax deduction through the government’s instant asset write-off scheme. 

Businesses with an annual turnover of $10m or less can instantly deduct the entire cost of assets that cost less than $20,000. The $20,000 threshold applies to each individual asset, so businesses can buy and write off multiple assets as long as each one costs less than $20,000.

Please visit the ATO website for more information on the instant asset write-off scheme.

6. Finalise your payroll and process superannuation payments

The next step in preparing your restaurant for the EOFY is to Complete all necessary payroll tasks and ensure that all your employee superannuation payments are accurately processed.

Finalise payroll

There are several key steps to finalise your payroll in preparation for the end of the financial year.

1. Review and reconcile payroll records: ensure that all employee details, wages, hours worked, leave balances, and deductions are accurately recorded. Reconcile any discrepancies or errors in the payroll data.
2. Complete final pay runs: ensure all employees receive their wages, including any outstanding payments, bonuses, or entitlements. Include any adjustments for overtime, penalty rates, or other allowances.
3. Calculate and prepare payment summaries (also known as annual payment summaries or group certificates): these summaries outline the total income, taxes withheld, and any superannuation contributions.
4. Submit payroll information to the ATO: you can usually submit this report electronically through the ATO’s Single Touch Payroll (STP) system, which is mandatory for most businesses in Australia.
5. Reconcile superannuation contributions: double-check that the contributions align with the superannuation guarantee requirements and any additional contributions made.
6. Keep records: maintain proper records of your payroll, including payment summaries, employee details, tax withholding records, and superannuation contributions.

Process superannuation

Processing your employees’ superannuation payments before the EOFY ensures you comply with the Superannuation Guarantee regulations to avoid penalties or potential legal issues associated with non-compliance.

Plus, making superannuation payments before the end of the financial year will allow you to claim tax deductions for those contributions. The contributions are generally tax-deductible in the financial year they are made, so processing them before year-end can help reduce your restaurant’s taxable income and potentially lower your overall tax liability.

7. Consult with a professional 

While you can prepare many of your documents for the end of the financial year, it’s essential to consult a tax professional to ensure you remain compliant. 

Partnering with a tax agent will help your businesses navigate the complexities of tax obligations, maximise your tax benefits and remain compliant. Plus, a tax professional will help ensure that your restaurant meets its obligations accurately and on time, minimising the risk of penalties or legal issues.

In a nutshell, employing a tax professional will save time and resources, allowing you to focus on your core operations while benefiting from expert guidance and peace of mind.

Remember: check your tax agent is registered with the Tax Practitioners Board.

Are you ready for the EOFY?

Preparing for the end of the financial year can be a daunting task for business owners. However, by following our comprehensive checklist, you can ensure your financials are in order and set your business up for success in the coming year.

From gathering and organising all necessary paperwork to updating your financial reports and researching tax deductions – there’s a lot to think about in the run-up to year-end. By following these steps and seeking professional guidance, you’ll be able to streamline your end-of-year processes and remain on top of your financial responsibilities with peace of mind.