The end of financial year is fast approaching. It’s a busy period for many Australians, and time-poor small business owners will be under the pump to get their affairs in order.
Research from Xero revealed that more than half (52 per cent) of small business owners found tax season to be one of the most stressful times of the year.
Given that so many brokers are small business owners themselves, they are well positioned to understand the unique pressures and cash flow squeezes that can arise for clients in this space. With that in mind, end of financial year can be an important time for brokers to reach out to their small business clients and offer some extra support.
From reviewing cash flow pain points over the last twelve months to discussing plans for expansion, brokers that initiate these conversations now can help set their clients up for success in the next financial year.
Remember that small business owners wear a lot of hats and may be swamped with a range of tasks, including bookkeeping and compliance, tax returns and planning. Savvy brokers should look out for these clients and make sure they are aware of the latest initiatives and legislation that could impact cash flow or help grow their business.
A key initiative brokers may want to update their small business owner clients on is the extension of the instant asset write off. The government recently increased the threshold to $30,000 for businesses with an annual turnover of less than $50 million. If a client has been considering purchasing a commercial vehicle or upgrading equipment for their business, it may be worth considering if they should act now to maximise the opportunity and claim any immediate deductions to which they may be entitled. Brokers might want to have an open conversation with clients about their goals for FY2020 and kick-start a dialog about funding solutions that can help them get there.
Brokers may also want to update their clients on the extension of Single Touch Payroll (STP) to employers with fewer than 20 employees. STP requires employers to provide real-time payroll data to the Australian Tax Office (ATO), increasing visibility on transactions and improving the ATO’s ability to manage debtors. The transition to automated, real-time payroll reporting may create some temporary cash flow challenges for small business clients as those using manual systems may need to upgrade to STP-compliant accounting software. As small businesses get into the rhythm of the new processes, they could require short-term funding support from their brokers.
End of financial year can also be an ideal opportunity for brokers to reach out to new prospects or engage existing clients with new products and services. Finance needs are front of mind and being able to provide a holistic range of funding support when it matters most will help strengthen relationships and open up new revenue streams.
While end of financial year can be a stressful period, it may be a chance for brokers to strengthen current relationships and expand their client base. Those that act now and take the proactive approach to solving finance challenges can help set both their clients’ businesses and their own up for growth.